New Delhi, July 25 (IANS) Former telecom minister A. Raja Monday sought to drag Prime Minister Manmohan Singh into the 2G spectrum case, prompting the opposition Bharatiya Janata Party (BJP) to seek his and Home Minister P. Chidambaram's resignation and the Congress joining the war of words.


Appearing before the special court of the Central Bureau of Investigation (CBI) presided over by Judge O.P Saini, Raja's lawyer said 2G spectrum transactions were approved by then finance minister P. Chidambaram in the presence of the prime minister.

"Telenor buying a stake in Unitech Wireless and Etisalat buying a stake in DB Realty -- the finance minister approved it in the presence of the prime minister," Raja's counsel Sushil Kumar told the court.

"Let the PM deny it," the counsel told the judge, referring to the particular time in 2007-08 when Chidambaram was finance minister. "If policies pursued by me were wrong, then all former telecom ministers since 1993 should also be in jail with me," he added.

"As telecom minster Arun Shourie distributed 26 licences, Dayanidhi Maran distributed 25 and I distributed 122. Numbers make no difference. It is to be noted that that none of them auctioned the spectrum. If they had done no wrong, why am I being questioned?"

The decisions by the former telecom minister in 2008 have been questioned by the probe agency, which said that by issuing radio spectrum at a mere Rs.1,659 crore ($350 million) for a pan-India operation he had caused losses worth thousands of crores to the exchequer.

Nine new telecom companies were issued the radio frequency airwaves, a scarce national resource, to operate second generation (2G) mobile phone services in the country. As many as 122 circle-wise licences were issued.

The probe agency questioned the manner in which the allocations were made.

A new player Swan Telecom had bought licences for 13 circles with the necessary spectrum for $340 million but managed to sell a 45 percent stake in the company to UAE's Etisalat for $900 million. This swelled its valuation to $2 billion without a single subscriber.

Similarly, another new player, Unitech, paid $365 million as licence fee but sold a 60 percent stake to Norway's Talenor for $1.36 billion, taking its valuation to nearly $2 billion, again without a single subscriber.

Reacting to Raja's statement in court Monday, Chidambaram said in both cases the nod was given to the promoters of the companies, not for selling their stake in their respective companies, but to raise fresh equity. "There was no sale of spectrum."

"In both cases, the prime minister wanted to know if there was any dilution of equity or issue of fresh shares. This was what was examined by the finance ministry. In both cases there was no sale of spectrum," an aide of Chidambaram quoted him as saying.

"The spectrum was allocated to the company that got the licence. The spectrum remained with that company. The company only issued fresh shares to induct fresh capital. There was no divestment," the aide further quoted the home minister as telling Monday.

Communications Minister Kapil Sibal also defended the decision taken by Chidambaram and said the dilution of equity by the two companies, as opposed to divestment of stake, was in line with the 1999 policy approved by the National Democratic Alliance government.

"It is unfortunate a responsible party like the Bharatiya Janata Party and its president (Nitin Gadkari) should demand the resignations of the prime minister and then finance minister without any basis whatsoever," Sibal told a press conference here.

The BJP president had earlier said Manmohan Singh and Chidambaram had no right to retain their respective posts, especially after one of their own former cabinet colleagues had had said in courts that the decisions were taken with their full knowledge.

The Congress party was equally vehement in defending its top party leaders. "The prime minister's integrity, his honesty or rectitude does not require anybody's certificate," Congress spokesperson Manish Tiwari said.

Sibal went a step further and asked BJP to look at the goings-on in Karnataka where its government led by Chief Minister M.B. Yeddyurappa was facing heat over illegal mining alleged by the state Lokayukta Santosh Hegde.

In the 2G case that has captured national and international headlines, the federal probe agency had concluded its arguments Saturday, paving the way for 17 accused, including three companies, to commence their defence and counter-arguments Monday.

Among the accused are former Tamil Nadu chief minister M. Karunanidhi's daughter and Rajya Sabha member Kanimozhi, Raja's aide R.K. Chandolia and former telecom secretary Siddharth Behura. The three firms are DB Realty, Swan Telecom and Unitech Wireles.