Note: This piece was originally published on December 4, 2017, and is being republished in the light of all those accused in the 2G scam case being acquitted by a CBI court.
New Delhi: It was said to be the biggest scam of independent India – the 2G spectrum case – which candidate Narendra Modi, in the run up to the 2014 Lok Sabha elections, made a by-word for crony capitalism under the United Progressive Alliance.
Remember, the Central Bureau of Investigation’s star asset was billionaire Anil Dhirubhai Ambani (ADA) – who was granted the status of a prosecution witness by the court. The understanding was that he could assist in the prosecution case against his own executives, who are accused in the 2G case of creating a web of shell companies within the ADA group that allegedly aided in transferring money to companies run by Karunanidhi’s family members. Nearly six years after the first 2G scam charge-sheet was filed by the CBI in 2011, the long-drawn trial is in its closing stages. On December 5, special judge O.P. Saini will set a date for the court’s judgment. When the verdict comes, one key question of public interest about the trial proceedings is the extent to which Anil Ambani’s testimony during the trial actually helped the prosecution.
For the CBI, the assistance of Anil Ambani – who denied any knowledge or involvement in the alleged transactions – became critical to solving this aspect of the 2G scam. But a cursory look at his testimony suggests he was of little or no help.
While the broad thrust of Anil Ambani’s testimony in court was reported in 2013, The Wire has obtained the full transcript of what he said in response to questions put to him by prosecutors. The picture it paints is one of almost total memory loss on his part, at least as far as matters relating to 2G-related issues were concerned.
As per his sworn testimony before the special CBI court, Anil Ambani remembers nothing of the companies he owns, the meetings chaired by him and, incredibly enough, whether he is even a promoter in some of the companies he runs.
While Tony Jesudasan, head of ADA group corporate communications and a director in its new defence venture, refused to comment on Anil Ambani’s apparent memory loss as disclosed by his testimony, he did confirm to The Wire that the transcript was authentic after asking for a copy of the document.
The ‘2G scam’ is shorthand for the massive irregularities in the allocation of second generation spectrum licenses for mobile communications and limited data transmission. The Comptroller & Auditor General (C&AG) quantified the scam loss at Rs 1.76 lakh crore. The CBI filed a charge sheet on April 2011 against Reliance ADA group managing director Gautam Doshi, senior executives Hari Nair and Surendra Pipara, as well as the then telecom minister A. Raja. Also charged was DMK leader Kanimozhi, daughter of party leader M. Karunanidhi, then an important ally of the Congress at the Centre.
Anil Ambani and his wife Tina Ambani appeared as prosecution witnesses. Yet detailed depositions made by him suggest that he does not remember how decisions were taken on crucial transactions linked to obtaining 2G licenses through a web of companies run by top executives of the group.
The CBI told the court that Ambani’s ADA group, had provided the entire funding for Swan Telecom Pvt Limited (STPL) – one of the firms accused of getting 2G spectrum in complete violation of stipulated rules.
The CBI says the company provided the funding through a “circuitous route” when STPL had applied for 2G licenses in 14 telecom circles across the country. In its charge-sheet, the CBI alleged that the Anil Ambani-controlled ADA group, which includes Reliance Telecom, used STPL as a front. Three of his executives were arrested and accused of setting up Swan Telecom to gain 2G licenses and valuable radio spectrum during the sale.
The CBI alleges that the entire funding of STPL was done by Reliance – that the transactions between Reliance ADAG firms, STPL and other companies were not genuine and were done to increase the paid up capital of STPL. According to the agency, payments were made by Reliance, a listed company, to Kalaignar TV director Sharad Kumar, who is also an accused in the case.
Charges were framed against the accused on October 22, 2011 under various provisions of the Indian Penal Code dealing with the offences of criminal conspiracy, cheating, forgery, faking documents, abusing official position, taking bribes by criminal misconduct under the Prevention of Corruption Act.
A ‘hostile witness’?
Anil Ambani was not charged and the CBI declared that it would use him as a prosecution witness who would give evidence of wrongdoing by his own three company officials. Going by his testimony, however, the CBI appears to have gained little by putting him on the stand. Indeed, media reports in August 2013 said that the CBI special prosecutor, U.U. Lalit – who is now a Supreme Court judge – declared Anil Ambani a ‘hostile witness’. However, TV18 quoted his lawyer, Vijay Agarwal, saying that Ambani was not being hostile. “Anil Ambani was not a hostile witness. When he was cross-examined by the prosecution he merely said he doesn’t remember whether it was his statement that had been recorded by the CBI,” he said.
According to senior Supreme Court lawyer Prashant Bhushan, who has followed the 2G case closely, Anil Ambani should not just have been declared “hostile” but the public prosecutor should have then questioned him as well. “If he continued saying he does not remember vital financial decisions taken to benefit him he should be prosecuted by the court for perjury. This deposition is a very clear cut case of trying to get away.”
The following are excerpts from Anil Ambani’s detailed testimony:
CC No. 01/11
CBI Vs.A. Raja and others
PW 140 Sh. Anil D. Ambani s/o late Sh. Dhirubhai Ambani, r/o 39, Sea Wind, Mumbai-400005, aged 54 years, B. Sc., MBA, Chairman, Reliance Group.
“As Chairman of Reliance group, I serve as non-executive chairman in the Reliance group. This group is constituted of several companies like Reliance Communications, Reliance Infrastructure, Reliance Power, Reliance Capital etc. Reliance Telecom is a subsidiary of Reliance Communications Limited. However, I do not serve as chairman of this company. This group was created in 2005-06 by demerger of erstwhile Reliance Industries Limited and since then, I am non-executive chairman of the group. The Reliance group, post demerger, is a group amongst top ten industries groups in India and represents a large number of companies and I may be a director in few of them.
“AAA Consultancy Services (P) Limited is part of Reliance group. I have been shown letter dated 09.05.2006 (D-402), with subject- amendment of authorized signatories for opening bank accounts, already Ex PW 6/W. The signature at point A belongs to me. I am not in a position to identify the signature at point B. In this document, there are three categories of signatories, who are authorized to operate the bank accounts, as per the capacity mentioned therein. As per this document, I belong to category I of the authorized persons. I am authorized signatory without any limit.
“I have been shown Ex PW 6/W-1, which is an extract of the resolution passed by the board of AAA Consultancy Services (P) Limited in their meeting dated 27.04.2006 at Mumbai. It has been certified by me and my signature appears at point A. I have been shown Ex PW 6/W-2 and it bears photographs of authorized persons, authorized to operate the account, and my signature appears at points E and M.
“I have been shown annexure II with heading- declaration for promoter owned company, appending to the account opening form (D-402). This document contains name of the promoter company and myself and Ms. Tina Ambani as common promoters of AAA Consultancy Services (P) Limited. I am not aware about the information in this document, as the document has not emanated from me.”
In his sworn testimony to the CBI court, Ambani repeatedly says, when questioned:
“I have been shown Annexure 11 with the heading declaration for promoter owned company appending to the account opening form (D-402). This document contains name of the promoter company and myself and Ms Tina Ambani as common promoters of AAA Consultancy. I am not aware about the information emanated from me. I have been shown minutes books of the board meetings of AAA. In this minutes book my attention is invited to minutes dated 17/01/2005 already ex PW 101/C-1. I have been shown present as an invitee in the meeting. As per these minutes subject no 12 9800 equity shares out of 10,000 shares were allotted to me. The names of the other shareholders are also mentioned in the same subject. As to the identity of those persons I am not aware how those persons are connected with the company. However I am aware of some of these persons as they are part of large secretarial department of the group. The minutes have been signed by the chairperson of the next meeting at point A Ms Tina Ambani. I have also been shown the minutes of the next meeting of the board as held on 18/01/05 in which I have been shown as present as director, but I do not remember having attended this meeting as I attend a large number of meetings. This meeting is shown to be chaired by my wife Ms Tina Ambani. These minutes are already ex PW 101/C-2. I do not recall the the business shown to be transacted in these minutes. However, this record must be correct. In these minutes shares have been shown to have been transferred to members of my family, that is my wife and children and that must be correct, but I do not recall the events.”
Ambani then adds that he is unaware of the minutes as he does not “prepare the minutes.” Throughout his testimony, Ambani fails to recall key events:
“I am unable to recall specifically if ADAE Ventures (P) limited is a company of my group. I have been shown the papers relating to an account opening form of this company (D 400) with ICICI Bank Limited, Backbay reclamation Mumbai and in this my attention has been invited to the specimen signatures and photographs of persons authorised to operate this account. My signature at point A appears with my photograph and that of my wife Ms Tina Ambani at point B along with her photograph. I have been shown extract of the resolution dated 04/09/06 passed by the board of this company and this has been signed by my wife Tina Ambani at point A. As per this document, I am an authorised signatory without any limit. I have been shown photocopy of PAN card appended to the aforesaid documents already. The signature at point A is mine and copy is of my PAN card. I have also been shown a copy of my wife’s signature and PAN card. As per the document ex PW 6/V-11 the registered address of the company is 3rd Floor Reliance Energy Center Santa Cruz (E) Mumbai-55. In these documents I have been shown Annexure 11 page 18 under caption “declaration for promoter owned companies” in which Reliance Energy Limited has been shown to be parent company and Ms Tina Ambani and myself have been shown to be the common promoters. However, I am not aware of this document. I cannot confirm if the above facts have been recorded correctly by the bank or not as there large number of companies in the group.
“I have been shown memorandum of Association of ADAE (P) ventures appended to the certification of incorporation of this company which certificate is already ex PW 6/V-7 (D-399). At the end of the memorandum of Association my name appears as the subscriber page 35 and that of my wife as initial subscriber. I am not aware of these details”
Ambani goes on in the same vein and says that he has deliberately not created any shell companies and several documents of those companies have been shown to him for the first time. Elsewhere in his testimony:
“It is correct that that I have a large number of companies and lakhs of employees. I also have millions of shareholders. It is correct that large number of documents come for my signature. It is correct that I am shown present in the meetings of a large number of companies however, shown present in only in the meetings I actually attend. It is correct that for this reason it is not possible for me to recall all the meetings attended by me, various documents signed by me and various decisions taken by me in those meetings. It is correct that if a document is presented to me for my signature, I presume the same to be correct, subject to it being put up after proper authorisation. The minutes books and other documents shown to me today in the Court, have been seen by me for the first time barring those which bear my signature. It is correct that whenever a document is put to me for signature it is not necessary for me to go through the contents on every occasion.”
The Wire also has a copy of Tina Ambani’s deposition to the CBI court in which she describes herself as “ordinarily a housewife”. Her response to most questions is identical to her husband, i.e. that she does not remember.
One question that may be raised by Anil Ambani’s testimony – and the apparent memory loss it discloses – is how a person who does not remember decisions taken, who signs on to documents without reading them, and who does not even remember if he is a promoter of companies owned by him, can carry out his duties toward million of shareholders in a “fit and proper” manner.
The judgment in the high profile 2G case is expected next month. The legal outcome of India’s biggest scam – which partly helped the BJP ride to power in 2014 – will also decide whether the credibility of India’s criminal justice system is still intact.
Swati Chaturvedi is a Delhi-based journalist.