Chidambaram claims he will vigorously contest. How? What is Aircel-Maxis Scam?

Eight points that show the illegalities committed in granting FIPB clearance to Maxis by the then Finance Minister P Chidambaram

Eight points that show the illegalities committed in granting FIPB clearance to Maxis by the then Finance Minister P Chidambaram
Eight points that show the illegalities committed in granting FIPB clearance to Maxis by P Chidambaram

A few hours after the Central Bureau of Investigation (CBI) charge sheeted P Chidambaram in Aircel-Maxis scam on July 19, he tweeted that he will contest the case “vigorously”. How vigorously Mr. Chidambaram? Like the way we depicted in the above header cartoon? Aircel-Maxis scam is an open and shut case. Below we are explaining point-wise violations and illegalities committed by Chidambaram and son. Mr. Chidambaram, do you have any answers?

What is Aircel-Maxis Scam?

  1. On January 2006, Malaysian giant Maxis Group through its Mauritius subsidiary applies to Foreign Investment Promotion Board (FIPB) for a takeover application of Chennai based mobile phone operator Aircel. The application said the value of takeover is 800 million US dollars, which was around Rs.3600 crores at that time.
  2. As FIPB Chairperson, Finance Minister P Chidambaram has only powers to approve up to Rs.600 crores and for an application exceeding Rs.600 crores, it had to be mandatorily sent to the Cabinet Committee on Economic Affairs (CCEA), also headed by Chidambaram. But in 2006, Saudi Telecom was having a sizeable share in Maxis and Saudi Telecom also had sizeable shares in Pakistan Telecom Company (PTC). So if this proposal went to CCEA, Home Ministry and Intelligence Bureau would have objected due to Maxis’ partner Saudi Telecom’s shareholding in Pakistan Telecom Company. So Chidambaram did a blatant violation by giving approval letters to Maxis and not sending the proposal to CCEA, which he was mandated to do.
  3. To avoid CCEA, in the Rs.3600 crores worth approval, the FIPB headed by Chidambaram purposefully avoided quoting the value in the approval letters and in some files wrote the value wrongly as Rs.180 crores! This was done on purpose to create confusion.
  4. At that time the maximum permissible Foreign Direct Investment (FDI) in Telecom Sector was only 74%. In FIPB approvals it was shown that Maxis took over 74% of the Aircel and rest was shown to belong to a little known Chennai based firm Sindya Securities and Investments Pvt. Limited, which was shown as owned by one Sunitha Reddy, belonging to the Apollo Hospital Group.
  5. But on the same day, Maxis declared to Malaysian Stock Exchange that they took over 99.3 percent shares of Aircel and also said that Sindya Securities was linked to them[1].
  6. Another big violation was the sharp differences in the share sale of Aircel at the same time. 74% of the shares were sold to Maxis at around Rs.3600 crore and the remaining 26 percent was sold to Sindya Securities for just around Rs.34 crores. Actually, this 26 percent should have been sold for Rs.1200 crores.
  7. Later, in May 2016, the CAG’s Auditors found that though Chidambaram illegally gave clearance for Rs.3600 crores, the actual money that came to Aircel from Malaysia was 4769 crores!
  8. Now the Enforcement Directorate (ED) has charge sheeted son Karti’s firms for accepting a bribe of around two hundred thousand dollars (Rs.1.16 crores) from three Maxis subsidiaries after father Chidambaram illegally approved the clearance to Maxis. This is a clear kickback to son for father’s illegality.

So Mr. Chidambaram, what are your comments on these major eight violations pointed above? You have been for the past two years writing columns in newspapers and tweeting on many subjects under the sun. Please answer to the above points.

References:

[1] How Maxis ended up owning 99% of Aircel & its filings in Malaysia Stock ExchangeFeb 12, 2017, PGurus.com

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11 COMMENTS

  1. Those days a dollar was worth around Rs 45 and a million dollars were roughly 4.5 crores. Two million makes it 9 crores. I think the ED froze a bank account in India that had about a crore and odd at the time of freezing. If such mistakes are made in the charge sheet, deliberately or otherwise, the case could be thrown out of the window. Agencies should be careful.

  2. Ms or Mr Ramapriya – it is not 2 Lac USD but 2 Million USD meaning 20 Lac and at 68 exchange rate at that time (if we assume) then the total bribe taken by KC is 13.6 crores. Further I have one small doubt in calculation of 26% at 1200 crores. It may be the total deal may have been valued at 3600+34 = 3634 crores by Maxis. But to favour Chidu’s benami company they must have allotted 26% at a very cheap value of 34 crores. Since total value is 3634 crores, the real value of 26% may be 3634 x 26% = 945 crores but given at a steep discounted value of 34 crores. Many times instead of giving bribe directly they give like this. After few years the Benami will sell the shares in market and then pocket huge amount.

  3. PC will fight this by writing more articles against PM . His pseudo- intellectual capabilities and mouthing untruths reveal his capabilities!!

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