A public interest petition has been filed asking the Supreme Court to cancel telecom licences granted to Vodafone International and to order a CBI inquiry against it for violation of laws including the Foreign Exchange Management Act. The petition, filed by a lawyer, is likely to be heard next week.
 
It is alleged that Vodafone manipulated the share-holding pattern with the help of its Indian partners to comply with the restrictions imposed on foreign direct investment. In the company’s writ petition before the Bombay high court, it allegedly concealed facts about the period of acquisition and showed them as a pure transaction between two foreign companies.
 
The high court dismissed the petition of Vodafone and asked it to pay Rs 11,000 crore as capital gains tax. The company appealed to the Supreme Court. A bench headed by Chief Justice S H Kapadia ruled that it need not pay the tax as the transactions occurred abroad. The government has since filed a review petition, which has not been listed for hearing.
 
The PIL, moved by lawyer Manohar Lal Sharma,  mentions the name of Chief Justice Kapadia’s son, Hoshnar Kapadia, as a “senior manager in the risk advisory department in Ernest & Young company (the sole legal and tax advisor of Vodafone), who had filed his due diligence report for Vodafone in the high court and the Supreme Court.” But Sharma has not said anything against either. He has also not asked for reconsideration of the Vodafone judgment on the ground of conflict of interest.
 
However, it alleges that the company “is so powerful that it succeeded in removing Additional Solicitor General Mohan Parasaran, the original counsel for the tax authorities, who was the biggest hurdle before it in the high court.”  In the three-month long arguments before the Supreme Court last year, the government was represented by Solicitor General Rohington Nariman while Vodafone fielded senior counsel Harish Salve.

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