Let's get the money back

 Even the winter session of parliament was disrupted. The focus seems to be on fixing responsibility.

There seems to be a consensus or at least majority opinion that a considerable amount of the people’s money has been lost. Now, the nation must establish it’s priority. Would the people like their money back first? Or would they like to attempt to fix responsibility for the amount lost?

The money allegedly lost to the exchequer would obviously have accrued to the beneficiary telecom or front companies who allegedly paid a price to politicians and other middlemen who facilitated the licenses/access to spectrum. The money could also be with people who were in a position to influence or deliver value in the shape of access to the desired commodity. This allegedly includes some politicians and middlemen.

The evidence that person or persons received consideration in exchange for favours provided is difficult to prove. The contortions we witness in courts and in the media are evidence that this is indeed the case. This is obvious not only in the spectrum matter but in many high profile issues which have their 15 minutes of fame and are then forgotten.

Unfruitful exercise

This then is the problem with the second category referred to above. In the kind of situation the country finds itself this is likely to be an unfruitful exercise. Ordinary citizens seem to sense that the system is responsible.

The companies referred to, however, are identified and present. As the allegation is that spectrum was given at less than the market value, the recipient companies are clearly the beneficiaries. Some of the benefits may have already accrued to them. In addition, some of the unfair benefits would accrue to them in the future on account of allegedly illegal advantage on account of low access costs.

Why not recover the entire loss from the telecom and front companies? The objection from some of them would be that they paid the market price to some of the middlemen companies. Even if that is the case it would be an error of judgment on their part. The people of India cannot bear the price of that error.

Attempting to enforce contracts is a cumbersome affair. The government may have to prove malafide on the part of responsible individuals. A full scale criminal investigation and prosecution shall have to be done successfully. This is unlikely to happen for more reasons than one.

Nationalisation of the telecom industry could be the answer. Once the funds lost to the people are paid back to the exchequer the question of returning the companies to the promoters could arise.

If a person loses money because someone has stolen it from him, what would he do? He would probably first ascertain how much was has lost. In the case of the 2G issue the CAG has done that and presented the nation with a mind boggling figure  — 1.76 lakh crore.

In a court of law, however, a company or the companies asked to restitute that amount to the national treasury would contest the liability in principal as well as contest the amount.

As collusion is alleged between representatives of the government, the evidence required to prove malafide will be decided as per the law pertaining to evidence. It is going to be a long and uphill struggle. The difficulties in making progress in the Satyam case points to this.

How to get results? One way is to nationalise the telecom sector. Once the people’s funds are   recovered the government can consider privatising the industry again. Nationalising the companies would in one stroke ensure that the people recover the loss. Efforts to recover money from the other parties to the fraud can continue but it would be the icing on the cake.

Prior to nationalisation some steps could be taken by the government to ensure that the money is not siphoned off by the telecom companies. Sections 388B to 388 E of the Companies Act,1956, could come in handy.