Why did Salman Khurshid bend backwards to please Anil Ambani ?

While the Telecom ministry, A Raja, and many senior officials and journalists are involved in the 2G scam, Kapil Sibal rubbishes CAG report and Corporate Affairs minister Salman Khurshid recently gave a clean chit to Anil Ambani’s Swam Telecom. Khurshid claimed that Anil Ambani had nothing to do with Swan. Is the Ministry of Corporate Affairs trying to cover up the 2G scam? Can Khurshid be added to the long list of clever lawyer-politicians who defind big industrialists?


According to records, Swan Telecom was a company, incorporated owned and controlled by the ADAG group. By giving Swan Telecom a clean chit, Khurshid and senior officers of Ministry of Corporate Affairs (MCA) are involved in a criminal conspiracy to cover up 2G scam, according to highly placed sources.
While the attention of entire country is focused towards the tug of war between the UPA government and the Opposition over the setting of a Joint Parliamentary Committee (JPC) to probe the 2G spectrum scam, the juicy details from corporate lobbyist Nira Radia tapes and Telcom minister Kapil Sibal calling the CAG report on the scam as utterly erroneous very little attention has been directed towards knowing the actual owner of the Swan telecom which made a huge amount from the scam.
Anil Ambani owns Tiger Trustee which in turn owns in turn owns Swan Telecom. If this is not the case, then who who owns Swan or Tiger Trustee?
None of the people involved in the cover up have answered the question as to who was the owner of Tiger Trustee from March 2, 2007, the date on which the application was filed for spectrum to October 18, the date on which pan-India license was given to Reliance Communication and the company Tiger Trustee was transferred to Balwa and Goenka for a paltry investment of Rs 4.99 crore? Was it the bribe for the license given to Reliance Communication, one day before the policy was announced.
In this context, a complaint filed by a petitioner from Bangalore before the Central Vigilance Commission (CVC) clearly established the complicity of the MCA in the whole game.
The clean chit by Khurshid has been given by certifying that Reliance Communication through its subsidiary Reliance Telecom never held more than 10 percent (9.9 percent) of equity shareholding of Swan Telecom. It has also been certified that Reliance Communication or its subsidiary Reliance Telecom did not hold any shares in Tiger Trustee, the company which held 90 percent of the shares of Swan Telecom. It has been stated that preference shares is not capital but more in the nature of debt and cannot be added to equity shares for the purpose of computing the percentage shareholding.
The certificate of clean chit given to Reliance Communication and the ADAG group as an act of cover up and corruption can be definitely questioned.
According to sources, the promoters of Reliance Communications held more than 66 percent of the shares of the company throughout the period of the scam. That could be seen and certified from the filings on the shareholding pattern of reliance Communication with the National Stock Exchange.
There are 11 individuals and 23 corporate bodies who have been identified as the promoter group in the filings made with the NSE.
The UAS guideline provided “ No single company/ legal person either directly or through associates shall have substantial equity holding in more than one licensee company in the same service area…The ceiling for substantial equity was notified at 10 percent. The guideline mean that only the company cannot hold more than 10 percent in another company or that the promoters of the company too cannot hold more than 10 percent of the shares in another company with a license. It definitely means the latter because if it was the former then Tatas, Mittals and the Ambanis, not to forget the Essars (who incidentally are in a similar Swan Telecom like situation) would float companies by the dozens and corner as many licenses as possible.
ROC and the Minister have not certified that no money has been invested directly or indirectly by the 11 individuals and the various shareholders of the 23 companies who promoted Reliance Communications.
More than 90 percent ( 90.09 percent to be precise ) of the shares of Swan Telecom were held by Tiger Trustee Pvt Ltd).
According to MCA records, Swan Telecom was registered as Swan Capital Pvt Ltd, was incorporated on July 13, 2006. One share was allotted to Himansu Agarwal and 4999 shares to Powersurfer Interactive (India) Private limited and that the address of both the shareholders was Reliance Energy Centre, Santa Cruz (East) Mumbai 400055.
In addition another 5,000 shares was subscribed by Reliance Energy Management Services Private Limited with the same address. The persons signing the Memorandum and Articles were all having the same address of Reliance Energy Centre, Santa Cruz (East) Mumbai 400055.
Is the incorporation of Swan Telecom (registered as Swan Capital) with the registered office address, the subscribers of the share capital and the directors of the company not sufficient evidence of the company being a 100 percent ADAG group company?
It was among the various shell companies that the Reliance group keeps on forming for multifarious activities depending on what is the requirement of the day. Most of them are investment companies in which the ownership is to be layered so that the identity of the true owner has to be concealed as India is the ultimate destination of hot money and crony capitalism. It is the vehicle through which the political masters are bribed and become part owners of the business they help to benefit through their illegal decision making process, the petitioner to CVC Arun Agarwal, in his complaint, says.
Swan Capital was the original name at the time of incorporation and it’s name was changed to Swan Telecom on Feb 15, 2007 since the company was needed for the telecom sector.
The company needed a capital on paper of over Rs 1100 crore to comply with minimum capital requirement norms for applying for license in the 13 circles.
The GSM license for which application was made by Swan Telecom was not pan India but for only those circles in which Reliance Communication did not have GSM license. The application was made for 13 circles as Reliance Communication had GSM license for Bihar, Himachal Pradesh, Kolkatta, Madhya Pradesh, Orissa and West Bengal. The fact that licenses for only 13 circles were applied for and that only those circles in which Reliance had GSM license was excluded shows that the ADAG group was the owner and in control of Swan Telecom through its proxy directors.
The company needed to have capital and reserves of over Rs 1100 crore in the balance sheet to apply for the license for 13 circles, according to the fee that was paid in 2001 in the bidding process for the fourth operator.
Whether the ADAG group clairvoyant powers of anticipating the future telecom policy of A Raja of allotting licenses on 2001 prices on a first come first serve basis or were a conspirator in dictating the policy can be decided by the quantum of investment made in Swan Telecom and the circles for which the application made seven months before the policy was announced.
The greater dilemma was to get Rs 1100 crores in Swan Telecom and also not apparently violate the licensing norms of an existing telecom company not owning more than 10 percent of the shares in another telecom company.
The money was there in the public listed company Reliance Communication from where it had to be re routed. It was not there in any of the privately held ADAG companies. The old model of using money from the public listed company and retaining control off the shares by privately held company was used. While 90 percent of the money was invested by a subsidiary of Reliance Communication, a public listed company (Rs 1002 crore), a little less than 10 percent of the shares of Swan Telecom were allotted to the ADAG group subsidiary of Reliance Communication. This was done by Reliance Communication subscribing to preference shares at 8 percent interest at an unimaginable premium of 99900 percent for an amount of Rs 992 crores.
The rest of the shares 90 percent were allotted to a company registered on June 20, 2006 as Tiger Traded Private Limited which was rechristened as Tiger Trustee with the approval of the Registrar of Companies.
It is this company which in effect was the owner of Swan Telecom, which has been ignored by the MCA deliberately. In fact it is this company which is at the root of the fraud and bribe giving. It is therefore not surprising that the Minister has chosen to ignore the holding company of Swan Telecom - Tiger Trustee- while giving a clean chit. The omission is deliberate, malafide and smacks of a quid pro quo.
Tiger Trustee registered address was Reliance Energy Centre, 3rd Floor, Santa Cruz (East) Mumbai 400055. It had two directors Ashok Karyekar and Paresh Rathod. The residential address of both the directors was Reliance Energy Quarters, Chembur. While Ashish Karyekar held directorship in 13 companies of the ADAG group whose name began with Reliance, Parash Rathod was a director in 12 ADAG companies.
The paid up capital of Tiger Trustee was Rs 1 lakh. The capital remained so till Oct 17, 2007, that is well beyond the unrevised cut off date of Oct 1, 2007 for applying for fresh telecom ( UAV) license.
Tiger Trustee owned 90 percent of the share capital of Swan Capital, while contributing only 10 percent of the funds and the balance was contributed by the public listed ADAG company Reliance Communication subsidiary.
Given the address of the holding company Tiger Trustee, the directors and their addresses, the paid up capital of mere Rs 1 lakh and fact that over Rs 1000 crore of money was siphoned off from the public listed company.
Feedback on:-
reporter@dayafterindia.com

Box
What did Manmohan Singh and A Raja get out of Rs 1.76 crore loss to the nation?
•Telecom minister A Raja awards 2G spectrum at lower price than the existing price •Bidders are selected by Raja and given on first come first serve basis
•122 licenses are given to selected bidders without following procedure
•88 license were given to incompetent and ineligible bidders
• Raja resorts to first cum first serve basis in very short time span
•CAG says the lower pricing caused Rs 1.76 lakh crore loss on the exchequer
•PM Manmohan Singh and A Raja remained silent for one year over the issue
• Nira Radia tapes reveal that A Raja was made Minister under the corporate pressure