The “routine transfer” of a senior officer at the sprawling, tree-lined telecom branch office of the Comptroller and Auditor General (CAG) on Delhi’s Shamnath Marg has raised eyebrows. R.B. Sinha, director-general, audit, post and telecom, was on June 22 peremptorily shifted out barely two years into the job. Sinha had played a key role in preparing the CAG audit reports into the 4G auction that was ultimately won by RIL’s Reliance Jio Ltd.
CAG officials dismiss the fuss, pointing out that the final report on the 4G auctions has already been submitted in the Budget session of Parliament this year. But the fact is there could be trouble ahead for Reliance Jio with the parliamentary accounts committee (PAC) taking up the report. At a PAC meeting in late May, BJP MP Kirit Somaiya proposed that the 4G auction be scrutinised.
Sinha’s presence at the PAC sittings could have made things uncomfortable for Reliance Jio and the DoT because of fears that he could have taken a view contrary to what was in the final CAG report. Parallels are being drawn with the 2G report officer, the late R.P. Singh. And focus is coming once again on Sinha’s draft reports on the 4G auction.
When copies of the draft ultimately found their way into the public domain last year, it again brought the spotlight on an unusual 4G auction in 2010. When the auctions got over, a little known company, Infotel Broadband Services (IBSPL), with a turnover of Rs 2.4 crore, emerged as the only pan-India winner to have successfully bid in each and every auction round, shelling out Rs 12,847.77 crore. Almost simultaneously, Reliance took over Infotel—run by Anant Nahata, of the notorious HFCL—and renamed it Reliance Jio.
The Axis Bank Rs 252-cr bank guarantee
Of course, the final report that was published in May 2015 was a far cry from the drafts. The CAG office brushed aside talk that this is a watered-down version, saying “a draft is a draft”. But documents accessed by Outlook show that as late as November 2014—when the final draft was sent to the CAG head office—field officers were sticking to their stand. Their argument: there was apparent rigging, complicity and collusion in the auction process which should be cancelled.
It raised red flags as to how Infotel—a company with a net worth of Rs 2.4 crore—could get a bank guarantee of Rs 252 crore without giving a security deposit. What nobody has yet been able to explain is why and how the Rs 252-crore bank guarantee cheque issued by Axis Bank, Mumbai, was tampered with. And who deleted the computer-printed name on the cheque in favour of a handwritten one.
When contacted, Axis Bank issued a bald statement “that all credit decisions were taken after due appraisal keeping in mind all aspects, including that of security”. According to sources, the Rs 252-crore guarantee was backed up against the existing limit of another client with AAA ratings—that’s why the change of name was done manually.
At least at this stage it seems DoT cannot be charged with collusion or dereliction. In response to a PIL, solicitor-general Ranjit Kumar had given an opinion for DoT: “No occasion can therefore be said to have arisen for DoT to inquire into the transaction between IBSPL and RIL unless there was any complaint/material with DoT to indicate their collusion....”
The second point raised by CAG made it to the final report. This was how the rules of the game were changed three years after the auction. As other telcos watched, voice services were suddenly allowed to be bundled on the same frequencies for those holding broadband wireless access (BWA) spectrum. In short, from being an internet service provider, Reliance Jio now became a full service provider. Moreover, this spectrum was given at 2001 rates in 2010.
When contacted, Reliance Jio says, “We have acquired all our spectrum at market prices through open and transparent bidding processes, the conditions for which were the same for all bidders.” But clearly, the last hasn’t been heard of this watered-down report. It remains to be seen what line the PAC, headed by Congress MP K.V. Thomas, takes. Will the BJP government take its so-called cold war with Mukesh Ambani to its logical conclusion?
