To The Honble Chief Minister Sri D.V.

Sadhanandha Gowda Government of Karnataka Vidhana Soudha Bangalore To The Honble Minister for Law And Parliamentary Affairs Sri S. Suresh Kumar Government of Karnataka Vidhana Soudha Bangalore Copy to: His Excellency, the Governor Sri H.R.Bharadwaj State of Karnataka Raj Bhavan Bangalore Further copy to: The Honble Minister for Home Affairs P. Chidambaram Government of India New Delhi Sub: The Global Investors Meet, Karnataka 2012 violates the law declared by the Honble Supreme Court in the 2G Telecom judgment and necessitates criminal investigation. Respected Sir 1. I am an Advocate in practice at the Honble Supreme Court and at several High Courts including the Honble High Court of Karnataka and the Delhi High Court. 2. The Karnataka Government has just concluded the Global Investors Meet, 2012, (referred to hereinafter as GIM, wherever the context admits) an investment soliciting event held at Bangalore on 07-Jun and 08-Jun. 3. The Honble Chief Minister of Karnataka has this morning announced that a sum of Rs.7.5 lakh Crores has been attracted during the two day meet.

4. I must state that this very GIM violates the terms of the law laid down by the Honble Supreme Court in its judgment on 02-Feb-2012 in the case of Centre for Public Interest Litigation v. Union of India [Writ Petition (Civil) No.423 of 2010] in which, the Court examined the manner of allocation of 2G telecom licenses by the Government of India in the year 2008 and held that the scheme adopted by the Government was arbitrary, capricious and bound to unduly and improperly benefit those with easier access to administrative information and corridors of power. Accordingly, the Supreme Court invalidated a host of telecom licenses granted under that arbitrary scheme and sustained its Order even upon efforts to seek review of the judgment. 5. The GIM just concluded by the Government of Karnataka is hardly distinguishable in principle from the manner in which the 2G telecom licenses were awarded by the Government of India in 2008. This is how - the Government of Karnataka invited various persons to attend an investment conference hosted by it. Private persons attended that conference and sought certain favours and concessions from the Government in return for promise to provide future employment to a specified number of persons. The Government agreed to the demands of such private persons on purely arbitrary and subjective satisfaction. Such offers from private persons and acceptances from the Government were concluded in principle in just two days, 07-Jun and 08-Jun. 6. The law in India governing Government grant of concessions, privileges, licenses or contracts to private persons is such that: If the Government of Karnataka is willing to extend to a private person P, benefits A, B and C in return for promises by P to provide X, Y and Z, it has a legal and administrative duty to publicise such terms to the wider public before concluding a contract with P; Upon such public notice, it may so happen that another private person Q may step in and ask merely for A and B in order to deliver X, Y and Z; Yet another private person R may also step in and ask for A, B and C in return for providing not just X, Y and Z but even more than that; Also, another private person S may intervene and promise to provide the same benefits as P but within a shorter duration; Further, another private person T may ask that he be provided a more reasonable time than a mere 2 days to match and exceed offers made by R and everyone else;

The Government is thereafter required to allocate its resources or grant concessions to a private person only upon an objective evaluation of all such offers received by it during a time frame in which reasonable notice of Governments offer and willingness was available to the public; However, even if such public notice fails to yield any competitive offer, the Government would still be free to conclude its contract with P without legal prejudice to its contractual position vis-visP. 7. As such, the Government of Karnataka has clearly committed a grave illegality in conducting the GIM 2012 to the extent that it has agreed to extend concessions to private persons without publicizing the proposed terms of such concessions to the public and without inviting offers and participation from competitors within that industry. 8. Therefore, I would ask the Government of Karnataka to immediately halt all actions proposed to be carried on by it in terms of such illegal promises made at the GIM - 2012. 9. Further, I would also like to point out that the Government of Karnataka cannot be legally bound by a promise made to a private person on terms squarely opposed to the law declared by the Supreme Court of India. A private person who seeks concessions from the Government is expected to seek such concessions only in conformity with the applicable and prevailing law. If private persons who participated at the GIM could not be bothered to keep themselves updated about the judgment of the Supreme Court in the 2G telecom case, they have none but themselves to blame for their ignorance. The Government of Karnataka is under no legal duty to enlighten private persons on the law applicable to their dealings with the Government. 10. At this juncture, I must state that there seems to be too much criminality surrounding these kinds of GIMs. A Times of India investigation [by Naheed Atulla, Bangalore City Edition, Page 1] published on 15-Oct-2011 reveals a serious criminal enterprise and conspiracy in the conduct of GIM 2010. It said: BANGALORE: There's more to all the hardsell by the Karnataka Government for the Global Investors' Meet (GIM) 2012 and claims of success achieved by the event's previous edition than meets the eye. It has come to light that at least three memoranda of understanding (MoUs) signed at GIM 2010 envisaged transfer of huge tracts of land in north Karnataka to non-existent companies promoted by major and medium industries minister Murugesh R Nirani's family and employees.

As industries minister and chairman of the state high-level committee for project clearances (SHLCC), Nirani virtually anchored GIM 2010. Documents available with The Times of India show that the state government entered into MoUs with three companies that were either non-existent or dormant. One MoU, signed with Nirani Sugars Ltd, however, was above board. The three questionable MoUs were worth Rs 2,100 crore and promised to provide 1,080 acres of land to the signatory companies at agreed locations in Bijapur and Bagalkot districts. The first such MoU was with MRN Sugars and Power Ltd, an unregistered company, during the 2010 GIM. A government order issued on January 5, 2010, had cleared the project. Due to non-availability of the name MRN, the firm floated a company called Vijayashree Sugars and Power Ltd on January 24, 2011. Employees of MRN were transferred to Vijayashree. The Government promptly sanctioned the transfer of approval to the new company on March 1, 2011, at the 24th SHLCC meeting headed by Nirani. The second MoU signed was with Shakti Steel and Power Industries, another unregistered company. The third MoU was signed with Shri Sai Priya Sugars, a dormant company at the time of signing. The address for all these companies was 4/2, Sidda Enclave, Seshadripuram, Bangalore, the office of Nirani's business entities. Admitting that Shakti Steel and Power Industries Pvt Ltd was an unregistered company, industries department sources said: "In a bid to fast-track bureaucratic procedure, we had to make some relaxations." Industries department sources maintained that when government signs an MoU, it's not possible to verify investors' antecedents. 11. If the aforesaid accusation as published by the Times of India be indeed true, the accused concerned have engaged in the most severe and aggravated counts of criminal breach of trust, cheating, defrauding the exchequer, impersonation, forgery, blatant corruption, criminal misconduct by a public servant and possible money laundering in relation to dormant and inactive entities. 12. Exaggeration and grandiose generally mark fraud and deception. It appears that GIM 2012 might have become a shield for greater corruption, fraud and deceit. The Government of Karnatakas announcement that the GIM 2012 has drawn in an investment of Rs.7.5 lakh Crores is seriously suspect if not laughable when one considers the fact that India as a country has attracted in financial years 2010-11 and 2011-12, a sum of 37.74 and 46.84 billion US

Dollars as foreign direct investment. That is, in the financial years 2010-11 and 2011-12, India has attracted foreign direct investment of about Rs.1.69 lakh crores and Rs.2.20 lakh Crores respectively. This inflow is in the context of India being generally seen as a favourite destination for investment by foreign entities. When such is the inflow into the territory of India itself, the announcement by the Government of Karnataka that in just two days of GIM 2012, it attracted an investment of Rs.7.5 lakh Crores that dwarfs the foreign direct investment received for India as a whole for the four financial years 2008-09, 2009-10, 2010-11 and 2011-12 might require a serious investigation by law enforcement for presence of fraud, nepotism, deceit, criminality and corruption. In other words, GIM 2012 most likely represents an elaborate scheme of fraud, deceit, illegality, nepotism and corruption. 13. Further, GIM 2010 was supposed to generate a crore or more in employment and it is generally accepted that not more than 12000 employments have materialized so far under that scheme. GIM 2012 may turn out to be a lot worse than GIM 2010 in terms of promised benefits ever seeing the light of the day. 14. As such, I would request the Government of Karnataka to forthwith halt all action in pursuance of illegal promises made by it to private persons during GIM 2012. I would also request the Government of Karnataka to initiate a criminal investigation into illegality, fraud, nepotism and corruption witnessed in GIM 2010 and GIM 2012. 15. I am motivated to write this letter because of what I saw, witnessed and heard at a farmers meet that I attended a fortnight ago with several other unrelated advocates. However, I am not opposed to investment or industrialization. Sincerely K.V.DHANANJAY