Entrepreneur C Sivasankaran is planning on filing a lawsuit against the Department of Telecommunications (DoT) in the Supreme Court after the recent acquittals in the 2G case, seeking compensation of Rs 3,400 crore which he claims he lost on the apex court cancelling the licenses.
The Supreme Court cancelled around 122 licences, which included six of Sivasankaran ‘s STel in 2012 citing irregularities.
According to Sivasankaran, he lost Rs 3,400 crore that he had invested in the company after the licenses were cancelled.
DoT Must Refund Money Lost
Sivasankaran has said that he will be filing a petition against the Department of Telecommunications next month in order to get his money back .
Sivasankaran alleged that he had been penalised despite being blameless, and that the latest order acquitting the accused in the 2G case will strengthen his claims for a refund.
STel is the third company after Videocon Telecom and Loop Telecom to suggest that they may seek compensation after a special CBI court acquitted all 18 accused individuals in the 2G case, along with related companies citing lack of proof of corruption in the process of allocating licenses in 2008.
STel, had received spectrum and licences to operate in the states of Orissa, Bihar, Himachal Pradesh, Jammu and Kashmir, Assam, and the Northeast. A stake of 42.7% was subsequently sold by him to Bahrain Telecommunications (Batelco) for around $175 million.
At its peak, STel was operating in five category C circles and had 3.6 million active subscribers as of February 2012.
When STel’s licences were cancelled in 2012, Batelco sold the stake back for $175 million to its Indian partner. After Sivasankaran failed to pay the amount, Batelco won an international arbitration case which awarded it damages of nearly $211 million from Sivasankaran.
The case is still being tried in various courts.
Telecom Companies Have Good Grounds
Lawyers representing the telcos affected by the 2012 license cancellation have said that the companies have strong grounds to seek compensation .
Videocon Telecom, which lost 21 licences, has declared that it will aggressively pursue its case filed in the telecom tribunal against the government in 2015. It is seeking damages of up to Rs 10,000 crore for loss of business , financial losses, and compensation.
Similarly Loop Telecom, which also lost 21 licences, is expected to push the cases filed by it internationally and also at the local telecom tribunal seeking compensation of $1.5 billion and Rs 4,000 crore, respectively.
Several other companies lost licenses in 2012 including:
- Unitech Wireless, in collaboration with Norway’s Telenor (22 licences);
- Sistema Shyam Teleservices, owned majority by Russia’s Sistema (21);
- Etisalat DB Telecom, a JV between UAE’s Etisalat and India’s DB Realty (15);
- Idea Cellular-Spice (13);
- Tata Teleservices (3).
According to sources Tata and Idea are unlikely to seek any compensation. Tata is currently in the process of exiting the telecom business while Idea is merging its operations with Vodafone India.
Sistema has said it is keeping its options open in terms of international arbitration, and will decide depending on its two ongoing local cases. Telenor has said it is reviewing the order.
CBI Charges Allege Manipulation of Spectrum Allotment Process
The Central Bureau of Investigation (CBI) alleged that the 122 licences along with startup spectrum had been sold in 2008 at prices set in 2001, which caused the exchequer a loss of Rs 30,984 crore as compared to the prices set at 2010’s airwave auctions.
It also alleged that the then telecom minister and several bureaucrats colluded to manipulate the first-come, first served process used for granting licences to favour some companies for the licenses.
