In June 2014, the Comptroller Auditor General of India asked the freshly-elected Narendra Modi government to cancel the broadband spectrum held by Reliance Jio. In a draft report, the CAG accused the Reliance group of “rigging” the spectrum auction while the Department of Telecom, or DoT, “failed to recognise the tell-tale sign of rigging”.
Alarm bells at CAG rang after its auditors noticed that the entity that had won the pan-India spectrum for Rs 12,848 crore in 2010 had a net worth of Rs 2.5 crore only. The entity was Infotel Broadband Services Private Limited, or IBSPL.
“The promoters of the IBSPL enriched themselves and made unfair gain,” the CAG draft report noted, attributing it to “inadequate eligibility criterion for participation in the auction” by the Department of Telecom.
Hours after IBSPL won the spectrum, it was bought out by Reliance Industries for Rs 4,800 crore. Three years later, it was rechristened as Reliance Jio Infocomm Limited, the company that now operates the telecom carrier Jio.
Mahendra Nahata, the promoter of IBSPL who now sits on the board of Jio, attracted media attention when the details of the draft report became public. But Surendra Lunia, another IBSPL director, and the managing director of the Infotel group since 2009, received no mention.
In August this year, Lunia’s name finally popped up in Indian newspapers when Vishwapradhan Commercial Private Limited, or VCPL – a company once directly controlled by the Reliance group – was taken over by the Adani group for Rs 113 crore. With it, the Adanis obtained 29 percent of the NDTV network, linked to a 2009 loan of Rs 403 crore that the network received from Reliance Industries through VCPL.
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