Aircel-Maxis case

The Aircel–Maxis case (also referred to as the Aircel-Maxis scandal) is an Indian corruption and money-laundering investigation stemming from the 2006 acquisition of the Indian telecom operator Aircel by Malaysia-based Maxis Communications.^[1] The case involves allegations of coercion in the sale of Aircel, quid pro quo favours extended by then-Telecom Minister Dayanidhi Maran, irregularities in Foreign Investment Promotion Board approval by then-Finance Minister P. Chidambaram, and associated money-laundering claims.

Aircel was incorporated in 1999 by businessman Chinnakannan Sivasankaran as a mobile network operatng company mainly serving Tamil Nadu (at first excluding Chennai) and quickly became a leading operator there. By the mid-2000s, it had expanded to other Indian states, including Odisha, Assam, and parts of the Northeast India. This was a time when India’s telecom sector was growing fast after market reforms, with rising demand for mobile services.

In late 2005, Sivasankaran agreed to sell control of Aircel. On 31 December 2005, Malaysia’s Maxis Communications, owned by T. Ananda Krishnan, signed a deal to buy a majority stake in the company. Reports said Sivasankaran received about $800 million. Maxis first bought 74%, which was the foreign investment limit in telecom then. The remaining shares were held by Indian partners, including entities linked to the Apollo Hospitals Group.^[2]

The deal was carried out through several companies, including holding firms based in Mauritius. In early 2006, more investments were made such as a Maxis-linked company bought 26% of Aircel for over ₹1,200 crore in January which almost completed the control of Aircel. However, the deal required approval from India’s Foreign Investment Promotion Board, which was under the Ministry of Finance at the time.^[3]

Although the sale happened during a telecom boom, it later came under scrutiny because of the 2G spectrum allocation case in 2008. Aircel was one of the companies that received 2G spectrum after the takeover.

On 6 June 2011, Sivasankaran filed a complaint with the Central Bureau of Investigation.^[4] He claimed he had been pressured, particularly by then-Telecom Minister Dayanidhi Maran, to sell his stake to Maxis instead of exploring other options like an initial public offering.^[5] Sivasankaran also alleged that brothers Dayanidhi and Kalanithi Maran received kickbacks in the form of investments by the Maxis group through the Astro network in Sun TV Network, owned by the Maran family.^[6] In the wake of the allegations, Maran resigned on 7 July.^[7] This led to investigations into the foreign investment approval process and possible irregularities, including alleged benefits to businesses linked to the Maran family.^[4]

On 10 October, the CBI registered a case and raided properties owned by the Marans. CBI sources said that although no evidence of coercion was found in the Aircel sale, they found substantial evidence that Maran had favoured the company's takeover by Maxis and deliberately delayed Sivasankar's files.^[6] On 8 February 2012, the Enforcement Directorate registered a money-laundering case against the Maran brothers^[8] for allegedly receiving illegal compensation of about ₹ 5.5 billion in the Aircel-Maxis deal.^[9]

During the CBI probe Sivasankaran said that the Maran brothers had forced him to sell his 74% share in Aircel to Maxis by threatening his life, giving the CBI a list of over 10 witnesses.^[5] In September 2012, the CBI said it finished its Indian investigation and was awaiting the response to a letter rogatory sent to Malaysia and a questionnaire from T. Ananda Krishnan before filing a chargesheet.^[10] On 29 August 2014, the CBI filed a chargesheet against Dayanidhi Maran, his brother Kalanithi Maran, Malaysian businessman T Ananda Krishnan, Malaysian national Augustus Ralph Marshall, six others and four firms — Sun Direct TV Pvt Ltd, Maxis Communication Berhad, Astro All Asia Network PLC and South Asia Entertainment Holding Ltd as accused in the case.^[11] On 29 October 2014, special CBI judge OP Saini said that he found enough evidence to proceed with the prosecution and hence summoned former telecom minister Dayanidhi Maran and others as accused.^[12] Based on the CBI chargesheet, the Enforcement Directorate on 1 April 2015, attached Maran brothers' properties worth Rs 7,420 million.^[13]

Subramanian Swamy alleged that in 2006 a company controlled by Karti Chidambaram, the son of Minister of Finance P. Chidambaram, received a five-percent share of Aircel to get part of ₹40 billion paid by Maxis Communications for the 74-percent share of Aircel. According to Swamy, Chidambaram withheld Foreign Investment Promotion Board clearance of the deal until his son received the five-percent share in Siva's company.^[14] The issue was raised a number of times in Parliament by the opposition, which demanded Chidambaram's resignation.^[15] Although he and the government denied the allegations,^[16] The Pioneer and India Today reported the existence of documents showing that Chidambaram delayed approval of the foreign direct investment proposal by about seven months.^[14][17][18]

In July 2018, the CBI named Chidambaram and his son as accused in its supplementary charge sheet. The charge sheet named 16 other co-accused, including former finance secretaries Ashok Chawla, Ashok Jha, former Aircel CEO V. Srinivasanand, Maxis owners Krishnan and Ralph Marshal.^[19]

• Waraich, Sushmita Biswal; Chaturvedi, Ajay (January 3, 2022). Aircel: The Rise and Fall of an Indian Telecom Company. SAGE Business Cases Originals. SAGE Publications. doi:10.4135/9781529790023.
• Aggrawal, Artee (2019). "Aircel Crisis: Disruptive Competition or Corruption– What Next?". FIIB Business Review. 8 (3): 186–191. doi:10.1177/2319714519855835.