New Delhi: Telecom firm Unitech Limited's Managing Director Sanjay Chandra on Saturday accused CBI in a Delhi court of "creating evidence" against him to support its claim that he had conspired with former Telecom Minister A Raja and others for allocation of the 2G spectrum to his firm.

Opposing the framing of corruption and conspiracy charges against him in 2G scam, Chandra told Special CBI Judge OP Saini the agency had leveled vague allegations against him and created evidence after lodging the FIR against him.

"Normally, we see that the prosecution moves from crime to the criminal. But here (in this case), CBI has moved from criminal to the crime and has created step-by-step evidence (against him)," Chandra's counsel RS Cheema said.

He submitted CBI has recorded the statement of some of the star prosecution witnesses in the case several times.

"Here, in this case, we have clear evidence of belated statement (of prosecution witnesses) recorded and that too with improvements," he said, adding "there is creation of evidence (by the CBI)."

He also questioned why all other telecom companies, alleged to be the beneficiary of spectrum allotment, are not before the court. "What is the rationale behind selecting some of us to face the music?" he said.

Made no personal gain: Chandra

Chandra tried to reject the view that the company had sold the shares of the company to Norwegian firm Telenor after acquring UAS licence for 2G spectrum to make windfall gains saying it had used the FDI to meet business obligations.

Defending himself against the charge that Unitech Wireless brought licence at a lesser price and then sold its share to Telenor to earn profits, Chandra told a Delhi court that he had never sold the shares and merely diluted 67.25 per cent equity to bring FDI for establishing telecom business and "there was no legal transgression in receiving equity from a foreign company."

Chandra's counsel RS Cheema told Special CBI Judge OP Saini that Telenor, major shares of which are held by Norwegian government, had as such made a total investment of Rs 6,135 crore for an equity stake of 67.25 per cent in Unitech 13 months after it received the pan-India telecom licence.

"The company had received approval from the Cabinet Committee on Economic Affairs and the FIPB for issuance of shares upto 74 per cent to Telenor," he said.

He told the court the investments from Telenor came in six tranches. It invested Rs 1250 crore in March 2009 in all Unitech Wireless holdings. Rs 1370 crore came on May 19, 2009 followed by Rs 1493 crores and Rs 2022 crores on January 7 and February 10, 2010 respectively.

Chandra questions CBI for sparing other telecoms

Chandra questioned CBI in a court here for sparing in the charge sheets other telecom companies which were ready with the demand drafts much before the LoIs were distributed for 2G spectrum licence.

Chandra, who has been in Tihar Jail in connection with the scam, told the court that not only his company but others like Tata Teleservices, Spice Communications and Loop Telecom were ready with the demand drafts in advance to comply with the conditions of LoIs (Letters of Intent).

"There are allegations that because Unitech (and Swan) kept the demand drafts for compliance of LoIs ready months before January 10, 2008, it goes on to show that we had prior inside information. But almost all applicants had their demand drafts ready much in advance," Chandra's counsel and senior advocate RS Cheema told Special CBI Judge OP Saini.

The counsel justified the issuance of demand draft in advance saying every condition, including the entry fee for licence, was known and there was no foul play involved in the entire episode.

"The UASL guidelines specify that within 30 days of making the application, LoIs will be issued. The figure payable as entry fee was already known and since nothing was left to guesswork, we got the DDs prepared. Had there been any inside information, we would not have blocked our money losing out interest on it," he said.

He also pointed out the statements of officials of Tata Teleservices, Spice and Loop as having told CBI that they also had got the drafts ready in advance. He said one official of Spice telecom had told CBI that the government may decide the priority on the basis of compliance of LoIs and so the company got the demand drafts prepared on January 9, 2007.

"The needle of suspicion should rather be on people who got it (DD) ready just a day before the distribution of LoIs. Chandra was not even at the Sanchar Bhawan on the date of LoI distribution," he said.

Chandra, who denied having manipulated the first-come-first-served policy, rebutted the allegation of conspiracy with former Telecom Minister A Raja and his former Personal Secretary RK Chandolia to tweak the cut-off date to September 25 from October 1, 2007.

"Unitech Wirelss applied for spectrum on September 24, 2007. Had there been any conspiracy to benefit itself, the date would have been brought to September 24 and not September 25, 2007 as on the last day also many companies had put in their application," Cheema said.

He also raised fingers at another telecom company Sistema Shyam saying it was one of the biggest beneficiary of the 2G spectrum allocation despite having applied after Unitech.

"It applied on the very cut-off date of September 25, 2007 and it is the company that got licences for all the 21 circles it applied for. Sistema Shyam is the most successful bidder, so why is it being kept out? If you have to go on the basis of some kind of suspicion, then it seems to be the biggest beneficiary," he argued.

CBI has alleged Chandolia was manning Unitech's application and had ordered that after receiving its application, no more entries would be accepted.

On the allegation concerning the ineligibility of Unitech Wireless on the date of application to apply for telecom licences since 'telecom' was not an object in the Memorandum of Association (MoA) of the company, Chandra said there was no requirement to amend the MoA in the first place.

"The UASL guidelines of 2005 do not mandate telecom to be in the object clause of the MoA. Also, telecom activity to be in the MoA or the Articles of Association was a prerequisite for the licence agreement and not the date of application. All that was required was that I acknowledge my agreement to do so as and when the need arises. A mere intention on the part of the company at the time of making the application would have sufficed.

"In any case, the MoA of Unitech Wirelss was duly amended and telecom activity was mentioned therein September 24, 2007, when the company applied for a licence. A shareholders' resolution was also passed for amending the object clause and due application was made to the Registrar of Companies," he said. Chandra said he has to be treated differently from other co-accused in the case as there was no allegation against him of paying any illegal gratification or being part of the money
trail.

"I'll suffer great prejudice by being tried with other accused as there is no allegation against me of any gratification or being part of money trail," Chandra said, adding "his case was that of a misjoinder as he is not found to be inter-linked to the other co-accused in the charge sheet."

Chandra's counsel also said Unitech Wireless had not caused any loss to the state exchequer by conspiring for non-revision of entry fee and non-auction of licences. "The Government of India has itself taken a stand in an affidavit filed before the court in CPIL vs UoI that the present policy for grant of licence is transparent and based on objectives of national telecom policy of 1999 and the tenth five-year plan.

"The entry fee was decided by the government to be kept at the rate of 2001 on basis of TRAI recommendations for growth of affordable teledensity and to see the economy grows by not burdening the industry with a high one-time entry fee," he said.

He also said the Centre itself had said that it was a normal practice in the corporate world to bring in investors for rolling out services to justify the infusion of equity by Norwegian firm Telenor.

The company had received approval from the Cabinet Committee on Economic Affairs and the FIPB for issuance of shares upto 74 per cent to Telenor.

"Investment of Rs 6135 crores from Telenor came in six tranches for issue of new shares equivalent to 67. 25 per cent with the first amount of Rs 1250 crore on March 20, 2009, second and third investment of Rs 1370 crore and Rs 1409 crore respectively. By the time the last investment was made, Unitech had hired 2348 employees and the FDI from Telenor was used to meet roll-out obligations of the company and infrastructure and business services."

Chandra's counsel also said, "All telecom companies have FDI and some have even sold equity after obtaining licences and earned profits. Tata sold 27.31 per cent shares to Docomo for over Rs 12,000 crores, Datacom sold shares to Videocon, Sistema Shyam sold it to Sistema."

"Bringing in FDI is something very normal and should have been welcomed," he said.

Arguments on behalf of Chandra were concluded on Saturday and arguments on behalf of Unitech Wirelss will be heard on Monday.

(Agencies)