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Ex-telecoms minister Raja arrested in India's 2G scandal

Loss on mobile phone spectrum sale set at $40bn, but arrest of Andimuthu Raja comes far too late, opposition says, renewing call for parliamentary inquiry.

India's former telecommunications minister, Andimuthu Raja, centre, is produced at a court in New Delhi, India, yesterday. Federal agents arrested Mr Raja and two other officials on Wednesday in an investigation into a scandal that allegedly cost the government billions of dollars.
India's former telecommunications minister, Andimuthu Raja, centre, is produced at a court in New Delhi, India, yesterday. Federal agents arrested Mr Raja and two other officials on Wednesday in an investigation into a scandal that allegedly cost the government billions of dollars.

NEW DELHI // Authorities have arrested India's former telecommunications minister in the latest move by the Congress-led government to try to deflect mounting criticism of the country's "culture of corruption."

Andimuthu Raja appeared in court yesterday, where the Central Bureau of Investigation (CBI) asked that he and two colleagues be kept in continued custody while the investigation proceeds. The court granted custody for five more days.

Mr Raja was arrested on Wednesday. It was the first arrest in the months-long corruption scandal, but it appeared to do little to ease pressure on the government, which has been hit with a spate of corruption allegations over the past year.

Opposition parties showed no sign of being satisfied with Mr Raja's arrest, and newspaper editorials yesterday said the government had much more to do to clean up its image.

Mr Raja has been at the centre of controversy since a report in November from India's comptroller and auditor general pointed to fraud in the sale of part of the 2G mobile telephony spectrum in 2008. As many as 122 new 2G licences were sold at prices far below market valuations, the report said, "flouting every canon of financial propriety, rules and procedures".

The flawed sale process may have led to potential revenue losses of up to US$40 billion (Dh147bn), said the report's final version, released in November. Mr Raja resigned shortly afterwards, but the government has been under immense pressure to prosecute him.

The opposition accuses the prime minister, Manmohan Singh, of waiting too long to act against Mr Raja.

"I only wish that the prime minister instead of living in denial had acted three years ago so this huge, monumental loss to the public exchequer had not taken place," Arun Jaitley, the leader of the main opposition Bharatiya Janata Party (BJP), said after the arrest.

Yesterday, Mr Raja offered to resign from his party, Dravida Munnetra Kazhagam (DMK), a key ally of Mr Singh's Congress party, but the party turned down the offer. At the DMK's general council meeting in Chennai, the party passed a resolution expressing support for Mr Raja.

"The arrest does not mean that he is guilty," a DMK representative told the media. The party waited almost 24 hours before making an official statement on the arrest.

On Wednesday, local media reported that some DMK members reacted violently to Mr Raja's arrest, throwing stones at buses, assaulting journalists from a local newspaper office, and blocking traffic on the motorway leading out of Mr Raja's hometown of Perambalur.

The Central Bureau of Investigation (CBI) had called Mr Raja for questioning three times, starting in November, before he was called in on Wednesday. Two of Mr Raja's colleagues were arrested on the same day. In a brief statement to the media, the CBI said the arrests were based on the three men's role allocating licences to certain companies ahead of others.

They were arrested, the CBI said, on charges of "conspiracy and abuse of official position" in giving financial advantage to certain companies that received licences to launch telecom services.

The controversy over the "2G scam", as it has come to be known, froze activity in the winter session of the parliament because opposition parties refused to push forward any legislation without first setting up a Joint Parliamentary Committee (JPC) to investigate the scandal.

Mr Raja's arrest seems to be an attempt to find a way out of that impasse and to portray the Congress-led coalition government as intolerant of corruption.

Abhishek Singhvi, a Congress party spokesman, said on Wednesday: "Unlike other governments, this government has pursued corruption cases honestly." The arrest, he added, was "nothing but the continuance of a legal process. The law has been taking its course and will continue to do so."

But Mr Jaitley, of the BJP, insisted that his party would continue to press for a JPC investigation, a signal that the next session of parliament may face more hurdles.

"The JPC demand was for larger issues: which lobbies were working to ensure that Mr Raja got the portfolio? Which interest groups were behind this?" he said.

foreign.desk@thenational.ae