2G scam: Dilution of equities to foreign firms legal, says A Raja

Former Telecom Minister A Raja Wednesday told a Delhi court dilution of equities by alleged beneficiaries of 2G spectrum scam to foreign firms was cleared by the government and did not constitute any offence.

"First of all, there was no sale of licences and then the offloading of equities was within the limit of 74%. Moreover, the transactions were cleared at the highest level (Foreign Investment Promotion Board)," senior advocate Sushil Kumar, appearing for Raja, told Special CBI Judge OP Sani.

"The then Finance Minister had himself told the Prime Minister that the dilution of equity was not sale and was completely allowed under the corporate law," he said.

The offloading of equities by Swan Telecom Pvt Ltd and Unitech (Tamil Nadu) Wireless Pvt Ltd to Dubai-based Etisalat and Norway-based Telenor respectively did not constitute any offence, he said.

Swan Telecom and Unitech did not sell their licences to make profits, he said, adding the dilution of shares was not sale and the government itself approved FDI upto 74% in telecom sector.

"All companies, which have been allotted licences by me, have brought in foreign equity," the counsel for Raja said.

Moreover, bringing FDI in telecom sector was necessary as no Indian firm was capable to roll out services on their own, he said.

"Kisi mein dum nahi hai is desh main, Tatas main bhi nahi jo apne dum pe roll out kar sakey. (Nobody in this country, not even the Tatas, has the capabilities to roll out the services on their own)," Kumar said.