SC fixes fugitive Maxis owners – No show is No go
The snail paced probe on Aircel-Maxis case took a notable step on Friday with Supreme Court directing fugitive Maxis owners to appear before the 2G Court or face the selling off of spectrum and reining of earnings in Aircel. The apex court’s 2G Bench headed by Chief Justice J S Khehar, Justice N V Ramana and Justice D Y Chandrachud gave a stern warning to the accused Malaysian based Maxis Group promoters T Ananda Krishnan and Ralph Marshal to appear before the 2G Court. SC directed the Department of Telecom and Ministry of Communication to formulate a plan within two weeks of selling of spectrum of Aircel if the fugitives are not appearing before the court.
…spectrum is India’s natural resource and foreign companies can’t enjoy income from it while disobeying Indian laws and courts.
Supreme Court’s Order came on the petition filed by Prashant Bhushan accusing Anil Ambani’s Reliance Communications and Airtel to enter into hidden deals with Aircel assets. He also urged for attachment of spectrum of Aircel and accused CBI and ED for not doing so, while the major promoter Maxis owners are evading Indian courts.
“We can’t allow anyone to use the assets of this country and run away from the process of law… if he wants to use the spectrum, he must come here and face the law,” said Chief Justice Khehar, reiterating that spectrum is India’s natural resource and foreign companies can’t enjoy income from it while disobeying Indian laws and courts.
This Order is a big setback to Reliance Communications which entered into talks with acquiring Aircel. Airtel also entered into talks with Aircel in sharing the spectrum in some circles. Both companies’ covert deals have now collapsed and by this Order, Aircel’s assets come under the control of Supreme Court’s monitoring.
The apex court’s message is a stern warning to former Finance Minister P Chidambaram’s son Karti who is evading the summons of Enforcement Directorate’s (ED) charges…
Ananda Krishnan and Ralph Marshal are charge sheeted by CBI and ED along with the Maran brothers for the past two years. The Malaysian tycoons have not turned up in the 2G Court, even after repeated summons and arrest warrants and the matter is now pending with Interpol. The charge sheet also mentioned the illegalities of Chidambaram in granting FIPB approval to Maxis in 2006 to take over Aircel. The illegalities in the FIPB deal approved by Chidambaram are mentioned in the box, at the end of the article.
The apex court’s message is a stern warning to former Finance Minister P Chidambaram’s son Karti who is evading the summons of Enforcement Directorate’s (ED) charges on accepting bribe from Maxis after father has approved the FIPB clearance illegally in 2006.
Hearing BJP leader Subramanian Swamy on CBI and ED inaction against Chidambaram and Karti, Justice Khehar said, the matter will be taken up during the next hearing on February 3. The Apex Court also ensured that no hardships would be made to the Investigating Officers. Swamy told the Court that ED’s Investigating Officer Rajeshwar Singh has been allotted charge of Lucknow Region also, while handling 2G and Aircel Maxis cases, pointing out dubious moves of corrupt people to scuttle the probe.
ED has already issued summons to Karti three times and he has not yet turned up. On Thursday Madras High Court has dismissed Karti’s petition against ED, accusing embarrassment. ED has unearthed Karti’s firm Chess Management received Two Lakh Dollars from three subsidiary companies of Maxis Group, after father Chidambaram illegally approved FIPB clearance.
The main violations committed by Chidambaram in the FIPB clearance:
The foreign investment was above Rs.3600 crores ($530 million) and those days the FIPB had power to clear only foreign investment upto Rs.600 crores and those above have to get mandatory CCEA (Cabinet Committee on Economic Affairs) clearance. As FIPB Chairperson, Chidambaram did not send the file to CCEA.
Those days in 2006, maximum foreign investment in telecom sector was 74%. But Maxis acquired more than 99% in dubious ways. And Maxis declared to Malaysian Stock Exchange that they acquired more than 99%, while at the same time declaring only 74% to Indian agencies.
74 percent of the shares of Aircel were sold to Maxis for around Rs.3600 crores ($530 million) and shockingly at the same time rest 26 percent of sold for a pittance of below Rs.30 crores ($4.4 million).
In early February 2015, CAG’s P&T Audit wing also found gross violations from FIPB in granting approval to Aircel-Maxis deal. Apart from CBI findings, CAG Auditors found that though FIPB illegally approved Rs.3600 crore ($530 million) foreign investment, the actual money came from Maxis was Rs. 4900 crores ($721 million). All the CAG auditor’s findings were ratified by both Telecom and Finance Ministries and final report is pending.
1. The conversion rate used in this article is 1 USD = 67.96 Rupees.
2. Text in Blue points to additional data on the topic.
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