Illicit India - Implosion: India's Tryst with Reality - page 207

giving the company a valuation of $2bn - a six-fold increase. In both cases, the extra funds
more than filled coffers depleted by a dramatic downturn in the real estate market.
The alarming point about this story was not just that a cabinet minister had conducted
these deals, but that he was not stopped for more than two years, despite the wide and critic-
al publicity, and was reappointed after the 2009 election. It emerged later that reservations
had been voiced by the PMO and the finance ministry about the allocation method, though
the fact that neither Manmohan Singh nor Chidambaram stopped the licences brought al-
legations later that they had wilfully condoned the corruption. Arun Shourie, who was the
telecommunications minister in the previous BJP government, was given documents by a
ministry official that proved Raja's dealings with the companies involved. Shourie told me
that he personally offered the documents to Manmohan Singh in October 2009 and warned
him that it was a 'massive corruption scandal that would explode'. Shourie says that the
prime minister touched his turban in apparent despair and exclaimed, 'What can be done!'
The prime minister's office failed to follow up on Shourie's offer of a briefing. 54
Police and other inquires began in 2009, and the story blew up into a major scandal when
the CAG estimated in a report in November 2010 that there had been a notional loss to the
government of Rs 176,000 crore. 55 That was an inflated figure based on notional assump-
tions of lost government income, and it was reduced later to Rs 69,626 crore and then to
Rs 57,666 crore. Raja was quickly dismissed and the Supreme Court criticized Manmohan
Singh for the government's 'inaction and silence'. 56 In its report, the CAG found that as
many as 85 out of 122 new licenses issued to 13 companies in 2008 did not satisfy eligib-
ility conditions. 57
Raja was arrested along with a senior bureaucrat and others, including Shahid Balwa, the
promoter of DB Realty, who was charged with others of channelling Raja's bribe money
into real estate - a money trail showed that payments of Rs 200 crore had been made by
DB Realty to Kalaignar TV, a company in which the family of the Tamil Nadu chief min-
ister had stakes. 58 Investigations involved other companies, but all the 13 people who were
arrested, including Raja, were released on bail in 2012.
Spin-off ramifications from this scandal reached across the Indian establishment with the
publication of private taped mobile phone conversations centred on Nira Radia, a lobby-
ist and public relations consultant. They revealed networks of politicians, officials, fixers
and a few excited journalists discussing 2009 cabinet formation during its 'horse-trading'
phase as well as other policy issues. Ratan Tata, who was then the head of the Tata group,
was embarrassed because he had personally made Radia the group's main public relations
consultant and his trusted adviser, and was heard speaking with her on the tapes. Other
contacts and associates caught (some apparently innocently gossiping) in the conversations
included N.K. Singh, a wealthy former top finance ministry and PMO bureaucrat; Tarun