Radia Tremor 2: Probing the Radia-DMK-Tata Motors link

Did the former lobbyist swing the central government contract for her clients and did money change hands? SC tells CBI to probe

The supply of low-floor buses by Tata Motors to the Tamil Nadu government in 2009 has come under the Central Bureau of Investigation’s scrutiny. It has been told by the Supreme Court to probe on what basis the Tatas got the orders and whether lobbying by former corporate lobbyist Niira Radia with the then DMK government helped the company to get the contract.

The key issues based on Radia’s intercepted conversations, as reportedly summarised by the CBI, are that Ravi Kant, now the vice-chairman of Tata Motors, was in touch with Radia so that she use her proximity with politicians in the DMK to secure the contract under the Jawaharlal Nehru National Urban Renewal Mission.

Other conversations indicate tough competition between Tata Motors and Ashok Leyland, and that complaints were sent to the state government on allegations of irregularities in the orders. CBI said it would be proper to refer this matter to the director-general of police in Tamil Nadu, but the SC rejected this and asked it to probe.

“The subjects mentioned in the eight issues (including the Tata Motors bus orders) are prima facie indicative of deep rooted malaise in the system, of which advantage has been taken by private enterprises in collaboration/connivance with government officers and others,” says the SC order of October 17.

And: “The conversations between Radia and her associates with various persons suggests corrupt means were used to secure favours from government officers, who appear to have acted for extraneous considerations. Therefore, we are convinced that instead of asking the state police or other agencies to make inquiries, it would be appropriate to direct an inquiry by CBI in respect of these issues as well.”

The Tata Motors order controversy dates back to early 2009, when the Congress-led UPA coalition at Delhi approved Rs 4,724 crore to jointly fund 14,504 buses for states in a second stimulus package. Of this, Rs 2,089 crore of the cost of buses was to be borne by the Centre. With the economy facing a slowdown, the fight between Leyland and Tata to get the orders became intense. It was then that the Tatas asked Radia for help; she was known for having good connections with DMK leaders.

According to the Union ministry of urban development's data,  Tamil Nadu was sanctioned 1,600 buses, at a cost of Rs 473 crore. Of the 1,600, Ashok Leyland bagged an order for 1,000, Tata Motors bagged 500 units and a 100-bus order went to Volvo.

When asked, a Tata Motors spokesperson said: “The matter is sub judice. Hence, we cannot comment on any specifics. Suffice it to say we will offer full cooperation in any inquiry by any government agency.”

Several attempts to reach the DMK’s spokesperson, T K S Illangovan, to seek comments did not succeeed. State government officials were not available for comment.

In the 2G telecom spectrum scam, Radia’s conversations with A Raja, former Union minister for telecommunications, and with DMK supremo K Karunanidhi’s daughter, Kanimozhi, leaked out. Raja and Kanimozhi are now facing trial in a Delhi court on charges of graft in the allocation of spectrum.