Telecom Lead Asia: Airtel CMD Sunil Mittal faces more trouble in the Asian wireless market as CBI on Wednesday submitted evidence in 2G spectrum case to the Supreme Court.
CBI, in a 11-page affidavit, said allocation of additional 2G spectrum was designed to boost Bharti Televentures’ IPO in 2002. Sunil Mittal and the then telecom minister Pramod Mahajan were part of the conspiracy, Times of India reported.
During the IPO in 2002, Sunil Bharti Mittal, chairman and group managing director, Bharti Tele-Ventures, said: “In a short span of time Bharti Tele-Ventures has emerged as a frontrunner in the Indian telecom sector. With its proven track record, Bharti Tele-Ventures intends to capitalize on the growth opportunities we believe are available in the Indian telecommunications market.”
The IPO of Bharti Tele-Ventures with a floor price of Rs 45 was the first ever 100 percent book building issue that opened for bidding from January 28, 2002 for six days and closed on February 2, 2002.
Thanks to institutional support, the IPO was oversubscribed over 2.5 times. While the total demand received under the book was Rs 2137.5 crore, the amount retained by the company at the issue price of Rs 45 per share is Rs 833.85 crore. The IPO became the backbone of Bharti Airtel’s growth in India. 2G spectrum was the game changer for Airtel’s success as it brought enough confidence to investors and valuation to the telecom operator.
The CBI, in its affidavit, backed a trial court’s decision to summon Airtel’s Sunil Mittal in the case relating to grant of excess spectrum during NDA regime, Times of India reported today.
It said Bharti’s IPO, launched on January 28, 2002, had run into rough weather following an adverse order from TDSAT on January 31. However, Mahajan along with the then telecom secretary Shyamal Ghosh and another official J R Gupta, allegedly carried out changes in rules the same day to help Bharti get around the TDSAT order and get additional spectrum.
It underlined that a newspaper reported Bharti’s success in getting additional spectrum even before a formal decision had been taken. The publicity led to unprecedented surge in requests for IPO on February 1, 2002, CBI argued in support of its theory about a conspiracy involving the DoT and Mittal.
It also highlighted findings of an investigation which showed that Bharti inflated its subscriber base to make it qualify for grant of excess spectrum. The agency also mentioned meetings between Mahajan and Mittal to back up its conspiracy charge.
The CBI affidavit mentioned the stand taken on April 8 by its senior advocate K K Venugopal and advocate Gopal Shankarnarayan before a bench headed by Chief Justice Altamas Kabir that the investigating officers had proposed naming Mittal in the chargesheet but the CBI director had differed with their view.
The latest development is just opposite to the earlier stand of CBI.
In December 2012, CBI had said that there was no case against Mittal in the 2G scam. The then CBI Director A P Singh and agency’s prosecution chief were of the view that there was no case against Mittal in the 2G spectrum scam. This has been disclosed in the opinion given to the Supreme Court last week by Attorney General Ghulam V Vahanvati, who said “there is no disagreement on this point” between the CBI Director and its Director of Prosecution Abdul Aziz. “Therefore, it is not for me to comment on the views of the executive officers of the CBI for the reasons already stated hereinabove,” the AG said in his opinion.
In its affidavit on Wednesday, CBI said: “All the three accused companies had applied for additional spectrum and got it together on July 17, 2002. The director CBI further observed that all the three accused companies have benefited from the questioned decision dated January 31, 2002 equally and are liable for prosecution on same footing.”
As regards Mittal’s involvement, the director CBI had observed that the same was broadly on two counts – one, that during the relevant period Mittal had met Mahajan and Ghosh for additional spectrum on a few occasions and had also signed a representation seeking additional spectrum, and secondly, he was the MD of Bharti Cellular and Bharti Televentures, whose IPO was the immediate reason for the January 31, 2002 decision.
“The director CBI was of the view that there was no evidence on record suggesting any misrepresentation of facts for additional spectrum by the said person or anyone else on behalf of the company. His associations / meetings with the then MoC&IT and the then secretary, DoT alone do not constitute any criminal intent or overt act on his part, as the meetings per se were not illegal as per evidence,” the agency said.