Why Chidambaram was let off in 2G case
(Nvonews.com)
In a judgment that comes as a relief for the embattled UPA government, a Delhi Court today dismissed Subramanium Swamy’s plea that Chidambaram should be made a co-accused in the 2G spectrum allocation case. Evidently the court did not see any merit in the plea, reading out just one terse sentence in its judgment, “The petition is dismissed.”
Why, though was the petition dismissed? After all Swamy was right in contending that being the man who cleared the deal between Telenor and Unitech, (Telenor bought 66% in Unitech for 6200 crores) he had effectively sanctioned the sale of the spectrum to third party before the end of the mandatory three years for which the parties who awarded licenses are supposed to keep it with them.
The answer may be got in the fact that first of all, the rule for the lock in period of 3 years was not very clear at that point of time. Secondly, with Swan selling 45% of its stake to Dubai based Etisalat, there already was a precedent for such a sale. The finance ministry could not have stopped the sale of Swan’s equity as the matter would not even have come to it. Companies are only required to seek permission when they sell more than 49% to a foreign entity.
Now, Telenor deal did require clearance from it, but given that Swan had done a similar deal, it could have been argued that Telenor was being penalized on technical grounds, and if the Finance Ministry was really serious it should go after both the deals, changing the law in the process.
Instead of opening the entire can of worms, Chidambaram however decided to let things be this time, advising that for the future the govt will be best advised to conduct such sales through auction, with a fixed reserve price.
“Spectrum is a scarce resource. The price for spectrum should be based on its scarcity value and efficiency of usage. The most transparent method of allocating spectrum would be through auction. The method of auction will face the least legal challenge. If government is able to provide sufficient information on availability of spectrum, that would minimise the risks and, consequently, fetch better prices at the auction. The design of the auction should include a reserve price,” one of Chidambaram’s missives to the PMO written of 15th January 2008 said.
In any case, Chidambaram wrong doing, even according to his detractors amounted to letting the sale go through, rather than facilitating it. The Telecom Ministry under Raja had avoided involving the FinMin, so Chidambaram can’t really be held guilty for something he came to know post-facto.
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