THE 3G LOOT (PART 2) - THE SCAM THAT DID NOT GO THROUGH

In this, the second part of my investigations into the 3G loot, let us find out the reasons why 3G telephony did not come of age in India 

and how a scam-in-the-making got aborted.

Sanjeev Kumar Dwivedi hailed from Ranchi, but had made Chennai his home. He had considerable expertise in the telecom industry. Acting as a consultant for Ice Group, he lined up 11 global companies for negotiations. After several rounds, Ice Group identified California based investment company Vale Ventures  headed by a NRI lawyer Selvaraj Venugopal.

My investigations reveal that Vale Ventures floated Venus Enterprises in Mauritius and routed all their funds to India taking advantage of the special tax treaty between India and Mauritius. In an e-mail to Ice Televentures, Selvaraj expressed his interest in the project  and preferred option to fully own the whole project  through an outright purchase. “However we are also open to consider creating a special purpose vehicle and get  into a joint venture between both our entities and  get the project done,” Selvaraj said. He was also ready to sign a Non-disclosure agreement.

Before signing non-disclosure agreement for the deal, Selvaraj demanded information regarding the tie up between TVS-ICS and Ice Group as the business plan provided by TVS–ICS had not mentioned the role of the Ice group in the deal.  But since Ice Group had claimed ownership of the project, he wanted an explanation from the consortium regarding the share of partnership.

During a meeting in Chennai in September 2009, he was offered the entire BSNL Infra deal worth Rs 40,000 crore. The size of the project and the money involved fascinated him. But since it was beyond his capacity to invest so much,  Selvaraj changed his business plan and started selling the project globally. Vale Ventures tied up with Larsen and Toubro in a joint agreement with Ice Televentures for implementing the project. The head of the Infrastructure Division of L&T issued a Letter of Intent for the deal with Selvaraj. 

Then he contacted Hong Kong based SAIF Partners headed by Ravi Adusumalli, NRI businessman from Hyderabad. Ravi Adusumalli and Selvaraj Venugopal arrived in Chennai in October 2009 and held several rounds of discussions with Samson Manuel, Shyam, BV Sanjeevkumar and Sanjeev Kumar Dwivedi and finalized the deal. According to the agreement, SAIF Partners was to channelise initial investment by the first week of November. 

According to Sanjeev Kumar Dwivedi, Ice Group (read the K Family) received the funds for the project in November. Interestingly, these deals were made without having original Purchase order from BSNL or any offer letter in the name of TVS-ICS.

But by this time, the story of the 1,76,000 crore rupees 2G scam had broken out. On October 22, 2009, the Directorate General of Income Tax Investigations raided the offices of the Director of Telecommunications in New Delhi in connection with the 2G scam. On November 16, the CBI sought details of the tapped conversations of corporate lobbyist Niira Radia to find out the involvement of middlemen in the grant of  spectrum to telecom companies. Things started getting too hot for Raja and his political masters in Chennai. And a decision was taken to leave the 3G infra deal in limbo till things quietened down.

Unfortunately for them, things did not quieten down. Raja was arrested in February 2010. Months later, Kanimozhi and others were also arrested. Charge sheets were filed. The media went crazy... In the mad frenzy, infrastructure for 3G was forgotten altogether. 

Like in 2G spectrum allocation, the BSNL Infra deal for 3G also lacked transparency and flouted every canon of financial propriety, rules and procedures to benefit a few shady companies and their benami promoters. But the brilliance of the BSNL deal was the real benefactors of the deal never came to the light. Just as a thief cannot cry out when stung by a scorpion, those who parted with money to corner what was patently an illegal deal, are in no position to complain.

The result – though a national loot did not take place as it did in the 2G allotment, the nation suffered in as much as the transmission towers were never installed. Even today, BSNL’s infrastructure is not adequate to support 3G. And that accounts for the large number of calls that do not go through, calls fading away or breaking midway, slow speed of internet connectivity, absence of VOIP and so many other maladies plaguing BSNL.