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2G spectrum scam
The 2G spectrum scam in India involved the issue of 122 licenses[1] of the 2G spectrum to 85 companies[1] including many new telecom companies with little or no experience in the telecom sector at a price set in the year 2001. The scam involved allegations regarding the under pricing of the 2G spectrum by the Department of Telecommunications which resulted in a heavy loss to the exchequer, and the illegal manipulation of the spectrum allocation process to favour select companies The issue came to light after the auction of airwaves for 3G services which amounted to 67719 crore (US$15.03 billion) to the exchequer[2] . A report submitted by the Comptroller and Auditor General based on the money collected from 3G licenses estimated that the loss to the exchequer due to under pricing of the 2G spectrum was 176379 crore (US$39.16 billion)[3] . The scam came to public notice when the Supreme Court of India took Subramaniam Swamy's complaints on record [With Case type:Writ Petition (Civil),Case No:10, Year:2011][4] .
The Controller and Auditor General holds Raja personally responsible for the sale of 2G spectrum at 2001 rates in 2008, resulting the previously mentioned loss of up to Rs. 1.76 lakh crores (US$40 [6] billion) to the national exchequer. In August, 2010, evidence was submitted by the Controller and Auditor General (CAG) showing that Raja had personally signed and approved the majority of the [7] questionable allocations. On April 25, 2011 Kanimozhi was named as a co-conspirator in the supplementary chargesheet filed by the Central Bureau of Investigation (CBI) in connection with the 2G spectrum case. The chargesheet, which was submitted before the Supreme Court establishes how Rs 200 crore connected with the scam traveled from a partnership firm of businessman Shahid Balwa of Swan Telecom to the [5] Karunanidhi family-owned Kalaignar TV. She has been charged with section 7 and 11 of the [8] Prevention of Corruption Act. The sections deal with acceptance of alleged gratification.
Kanimozhi Karunanidhi
Bureaucrats involved
2G spectrum scam
Civil Servant (IAS officer of 1973 batch UP cadre) Civil Servant (IAS officer of 1973 batch Kerala cadre).
He was the Telecom secretary who served in the DOT at the time of the 2G allocation.
P. J. Thomas
He was the Secretary of the Department of Telecommunications. On September 7, 2010 he was appointed as the Chief Vigilance Commissioner. Thomas later stepped down after the Supreme Court questioned his track record as a civil servant in the wake of investigations into the 2G spectrum allocation scam.
He is alleged to have recommended policies that favored certain Telecom companies when he was heading the [9] [10] TRAI. Post retirement, Baijal joined Noesis, a consulting firm. Raja has made references to Baijal's decisions in 2003 as the basis for his decisions in 2008; something which has been attacked by Arun Shourie and several media pundits. The houses and offices of the bureaucrat were recently visited by the Central Bureau [11] of Investigation as part of their investigations. However, Baijal is expected to get a clean chit in this issue [12] He was private secretary of Raja during UPA-I when the licences were awarded. When Raja became the Telecom Minister once again in UPA-II, Chandolia had been promoted to the Joint Secretary rank. Raja re-designated him Economic Adviser, that gave him the charge of all important policy-related work. Chandolia interacted with all the licensees. It is said that it was Chandolia who, from DDG-access services A K [13] Srivastava's room, had handed out letters of intent to representatives of various companies.
RK Chandolia
Corporations involved
Allianz Infra[14] Aircel Dishnet Wireless Loop Mobile Sistema Shyam Mobile (MTS) Sistema Mobile Russia Reliance Communications S Tel Swan Telecom Tata Tele Services Unitech Group Videocon Telecommunications Limited Vodafone Essar Virgin Mobile India
2G spectrum scam
All of them have either been questioned by the CBI or are prospective suspects in the scam.
Petitioners to 2g scam
Subramaniam Swamy, activist lawyer and politician, whose letters to the Prime Minister demanding action and affidavits and cases in the Supreme Court brought the issue into the public limelight. Paranjoy Guha Thakurta, a journalist who was one among the very first to write on the irregularities in the awarding of 2G spectrum allocation by the Telecom Ministry. He is also one of the petitioners in the 2G PIL currently being heard in the Supreme court.[16] Prashant Bhushan, on behalf of the Centre for Public Interest Litigation. Anil Kumar, on behalf of the civil society organisationTelecom Watchdog Others:Several eminent people like former chief election commissioners J.M. Lyngdoh, T.S. Krishnamurthy and N. Gopalaswami and former central vigilance commissioner (CVC) P. Shankar are also petitioners in the suits filed by civil society groups.[14]
Loss to Exchequer
The Comptroller and Auditor General of India used three different methods to assess the presumptive loss to the exchequer resulting from not auctioning 2G spectrum.[17] The first method was based on the fact that S Tel, one of the licensees, explicitly offered to pay significantly higher license fees for the spectrum. Based on the fees offered by S Tel, the CAG estimated the loss to the exchequer at 67364 crore (US$14.95 billion) The second method was based on the price discovered by the 3G auction in 2010. The CAG reasoned that since 2G is really 2.75G (EDGE), its price should be comparable to that of 3G licenses. Based on this method, the CAG estimated the loss to the exchequer to be 176000 crore (US$39.07 billion) The third method was based on the fact that some of the licensees received FDI in the form of equity, shortly after the spectrum allocation. The CAG reasoned that this equity infusion was entirely due to the value of the allocated spectrum; this can be construed as re-sale of the spectrum by the licensee, and hence was a valid basis for assessing loss to the exchequer. Based on this method, the CAG estimated the loss to the exchequer to be anywhere between 57666 crore (US$12.8 billion) (based on Etisalat's investment in Swan Telecom) and 69626 crore (US$15.46 billion) (based on Telenor's investment in Unitech). For its part, the Congress-party led government has publicly defended itself on this count and Kapil Sibal, who replaced A. Raja as the communication minister, has refuted the CAG reasoning.[18] He has also justified his government's decision not to auction 2G spectrum as being in line with the policy guidelines laid down by the 10th Five-Year Plan.[19] [20]
2G spectrum scam
Response to scam
In early November 2010 Telecom Minister A Raja resigned. In mid November the comptroller Vinod Rai issued show-cause notices to Unitech, S Tel, Loop Mobile, Datacom (Videocon), and Etisalat to respond to his assertion that all of the 85 licenses granted to these companies did not have the up-front capital required at the time of the application and were in other ways illegal.[24] Some media sources have speculated that these companies will receive large fines but not have their licenses revoked, as they are currently providing some consumer service.[24] In response to the various allegations, the Govt of India has replaced the then incumbent Telecom minister, A. Raja with Kapil Sibal who has taken up this charge in addition to being the Union minister for Human Resources Development.Mr Sibal contends that the "notional" losses quoted are a result of erroneous calculations and insists that the actual losses are nil.[18] [19] The CBI conducted raids on Raja and four other telecom officials - former telecom secretary Siddharth Behura, Raja's personal secretary R K Chandolia, member telecom K Sridhar and DoT deputy director general A K Srivastava on 8 December 2010.Kanimozhi, DMK MP and Karunanidhi's daughter, was arrested and sent to Tihar jail by a Delhi court which dismissed her bail plea in the 2G spectrum scam, saying there was a possibility of witnesses being influenced considering the "magnitude" of the crime..[25]
2G spectrum scam On April 2, 2011, the CBI filed its first 80,000 page chargesheet in the 2G spectrum scam before a Special Court in Delhi naming nine individuals and three companies. It said the wrongful acts of the accused deprived the government exchequer of possible revenues amounting to INR Rs 30,985 crore (USD $ 6,983,322,233). The accused include the following individuals:[30] 1. 2. 3. 4. 5. 6. 7. 8. 9. Andimuthu Raja, former Telecom minister Siddharth Behura, former Telecom Secretary R.K. Chandolia, Raja's former personal secretary Shahid Usman Balwa, former Director of Swan Telecom (now Etisalat DB) Sanjay Chandra, Managing Director of Unitech Ltd and Unitech Wireless Gautam Doshi, Group MD, Reliance Anil Dhirubhai Ambani Group Hari Nair, Senior Vice-President, Reliance Anil Dhirubhai Ambani Group Surendra Pipara, Senior Vice-President, Reliance Anil Dhirubhai Ambani Group and Reliance Telecom Ltd Vinod Goenka, Director, Swan Telecom and Managing Director of DB Realty
The three companies named are: 1. Swan Telecom 2. Unitech Wireless 3. Reliance Telecom In the first chargesheet, the CBI had named lobbyist Niira Radia and 124 others as witnesses. On 25 April 2011, in its second chargesheet in the scam, the Central Bureau of Investigation (CBI) named five more accused individuals:[31] 1. Kanimozhi - Rajya Sabha Member of Parliament (DMK) and daughter of Tamil Nadu ex-Chief Minister M Karunanidhi 2. Sharad Kumar of Kalaignar TV 3. Karim Morani of Cineyug Films 4. Asif Balwa of Kusegaon Realty 5. Rajiv B Agarwal of Kusegaon Realty On 20 May, 2011, Special CBI Judge O P Saini of the Delhi court ordered the arrest of DMK Member of Parliament Kanimozhi and Kalaignar TV Managing Director Sharad Kumar] after rejecting their bail pleas in the 2G spectrum case.[32]
2G spectrum scam
References
[1] "Subramanian Swamy moves SC for cancellation of 2G spectrum licences" (http:/ / articles. timesofindia. indiatimes. com/ 2011-01-04/ india/ 28374908_1_2g-spectrum-licences-cut-off-date). The TImes of India. 2010-05-19. . Retrieved 2011-05-06. [2] "3G spectrum auction: Government collects Rs67,719 crore booty" (http:/ / www. dnaindia. com/ money/ report_3g-spectrum-auction-government-collects-rs67719-crore-booty_1385003). DNA. 2010-05-19. . Retrieved 2011-05-06. [3] "CPM demands A Raja's resignation" (http:/ / timesofindia. indiatimes. com/ india/ CPM-demands-A-Rajas-resignation/ iplarticleshow/ 6872636. cms). The Times of India. 2010-11-05. . Retrieved 2011-05-06. [4] "Case Number" (http:/ / courtnic. nic. in/ supremecourt/ casestatus_new/ caseno_new. asp). Courtnic.nic.in. . Retrieved 2011-02-11. [5] "Accused have been booked under sections" (http:/ / www. hindustantimes. com/ CBI-hits-Karunanidhi-family-names-Kanimozhi-as-accused/ H1-Article1-689484. aspx). The Hindustan Times. 2011-04-25. . Retrieved 2011-04-25. [6] Singh, Shalini (28 October 2009). "BJP takes on Raja over telecom spectrum scam" (http:/ / timesofindia. indiatimes. com/ india/ BJP-takes-on-Raja-over-telecom-spectrum-scam/ articleshow/ 5170667. cms). Times of India. . Retrieved 2009-11-08. [7] Joseph, Josy (August 30, 2010). "CAG draft report nails Raja role in 2G scam" (http:/ / timesofindia. indiatimes. com/ india/ CAG-draft-report-nails-Raja-role-in-2G-scam/ articleshow/ 6458465. cms). The Times Of India. . [8] "DMK takes a hit, Kanimozhi charged and summoned" (http:/ / www. hindustantimes. com/ DMK-takes-a-hit-Kanimozhi-charged-and-summoned/ H1-Article1-689484. aspx). Hindustan Times. April 25, 2011. . [9] http:/ / www. taratv. com/ top_story. php?task=full& newsid=2151 [10] "Taming the retired" (http:/ / www. thehindubusinessline. com/ 2010/ 12/ 17/ stories/ 2010121751660900. htm). The Hindu Business Line. 2010-12-17. . Retrieved 2011-02-11. [11] CBI conducts raids; swoops on DMK associates, Niira Radia & Pradip Baijal http:/ / economictimes. indiatimes. com/ news/ politics/ nation/ CBI-conducts-raids-swoops-on-DMK-associates-Niira-Radia--Pradip-Baijal/ articleshow/ 7108883. cms [12] Relief for Baijal http:/ / www. ndtv. com/ article/ india/ cbi-to-question-kanimozhi-in-2g-scam-relief-for-baijal-sources-88698 [13] "Who is R K Chandolia?" (http:/ / www. ndtv. com/ article/ india/ who-is-r-k-chandolia-82994). Ndtv.com. 2011-02-02. . Retrieved 2011-02-11. [14] "Government, 11 telecom firms get court notice on 2G spectrum" (http:/ / www. sify. com/ finance/ government-11-telecom-firms-get-court-notice-on-2g-spectrum-news-default-lbktavcihhd. html). Sify.com. . Retrieved 2011-02-11. [15] http:/ / www. hindustantimes. com/ 2G-spectrum-scam-Anil-Ambani-is-now-a-suspect/ Article1-663738. aspx [16] "2G scam: Why I filed a PIL against the telecom minister - Rediff.com Business" (http:/ / business. rediff. com/ slide-show/ 2010/ sep/ 16/ slide-show-1-why-i-filed-a-pil-against-the-telecom-minister. htm). Business.rediff.com. . Retrieved 2011-02-11. [17] "Performance Audit Report on the Issue of Licenses and Allocation of 2G Spectrum by the Department of Telecommunications, Chapter 5" (http:/ / saiindia. gov. in/ cag/ sites/ default/ files/ 2010-11_19_PA-civil/ chap5. pdf). Comptroller and Auditor General of India. . [18] "Offence as Defence" (http:/ / www. frontlineonnet. com/ fl2803/ stories/ 20110211280311200. htm). Frontline. 2011-01-07. . [19] "2G scam: No public loss to exchequer, says Kapil Sibal" (http:/ / www. moneycontrol. com/ news/ business/ 2g-scam-no-public-loss-to-exchequer-says-kapil-sibal_511785-1. html). MoneyControl.com. 2011-01-11. . [20] "Tenth Five Year Plan, 2002-2007" (http:/ / planningcommission. nic. in/ plans/ planrel/ fiveyr/ 10th/ volume2/ 10th_vol2. pdf). Planning Commission. 2002-12-21. . [21] Amol Sharma (1 Dec 2010). "Wait a Minute, What Exactly Is Barkha Dutt Accused of?" (http:/ / blogs. wsj. com/ indiarealtime/ 2010/ 12/ 01/ wait-a-minute-what-exactly-is-barkha-dutt-accused-of/ ). IndiaRealTime. Wall Street Journal. . Retrieved 4 December 2010. [22] "Government orders probe into leaking of Niira Radia tapes" (http:/ / economictimes. indiatimes. com/ news/ politics/ nation/ Government-orders-probe-into-leaking-of-Niira-Radia-tapes/ articleshow/ 7010403. cms). The Economic Times. 29 Nov 2010. . Retrieved 4 December 2010. [23] PAC Quizzes Niira Radia, Rattan Tata in 2G Scam Probe http:/ / abclive. in/ invetigative-news/ political-investigation/ 161-pac-niira-radia-rattan-tata-2g-scam-probe-. html [24] Joji Thomas Philip (18 Nov 2010). "2G scam: Govt to pull up five telcos". The Economic Times. The Times Group. [25] "2G spectrum scam: CBI raids residences of A Raja - The Times of India" (http:/ / timesofindia. indiatimes. com/ india/ 2G-spectrum-scam-CBI-raids-residences-of-A-Raja/ articleshow/ 7063519. cms). Timesofindia.indiatimes.com. 2010-12-08. . Retrieved 2011-02-11.
2G spectrum scam
[26] "CBI arrests ex-telecoms min A.Raja over graft" (http:/ / in. reuters. com/ article/ 2011/ 02/ 02/ idINIndia-54593820110202). Reuters India. 2 February 2011. . Retrieved 2 February 2011. [27] PTI, Feb 2, 2011, 07.41pm IST (2011-02-02). "2G spectrum scam: Former telecom minister A Raja arrested - The Times of India" (http:/ / timesofindia. indiatimes. com/ india/ 2G-spectrum-scam-Former-telecom-minister-A-Raja-arrested/ articleshow/ 7411212. cms). Timesofindia.indiatimes.com. . Retrieved 2011-02-11. [28] "CBI arrests DB group MD Shahid Balwa in 2G scam" (http:/ / www. hindustantimes. com/ CBI-arrests-DB-group-MD-Shahid-Balwa-in-2G-scam/ Article1-660153. aspx). Hindustan Times. 9 February 2011. . Retrieved 9 February 2011. [29] "CBI arrests Balwa's brother and another" (http:/ / www. hindu. com/ 2011/ 03/ 30/ stories/ 2011033055971400. htm). Chennai, India: The Hindu. 30 March 2011. . Retrieved 30 March 2011. [30] "CBI charges Raja, 8 others and 3 companies in 2G case" (http:/ / www. thehindubusinessline. com/ industry-and-economy/ info-tech/ article1594668. ece?homepage=true). The Hindu Business Line. 2 April 2011. . Retrieved 2 April 2011. [31] "Kanimozhi charged with conspiracy in 2G scam by CBI" (http:/ / economictimes. indiatimes. com/ news/ news-by-industry/ telecom/ kanimozhi-charged-with-conspiracy-in-2g-scam-by-cbi/ articleshow/ 8079728. cms). The Economic Times. 25 April 2011. . Retrieved 26 April 2011. [32] "2G scam: Kanimozhi in Tihar Jail after court rejects bail plea" (http:/ / www. indianexpress. com/ news/ 2g-scam-kanimozhi-in-tihar-jail-after-court-rejects-bail-plea/ 793552/ ). The Indian Express. 20 May 2011. . Retrieved 20 May 2011. [33] http:/ / www. rediff. com/ news/ report/ reports-2g-rejection-unconstitutional-joshi/ 20110430. htm [34] "When DB Realty ended up dialling the wrong no - Money - DNA" (http:/ / www. dnaindia. com/ money/ report_when-db-realty-ended-up-dialling-the-wrong-no_1505661). Dnaindia.com. . Retrieved 2011-02-11. [35] "2G scam: The DB Realty-DMK puzzle - Rediff.com Business" (http:/ / www. rediff. com/ business/ column/ tech-2g-scam-and-the-db-realty-dmk-puzzle/ 20110209. htm). Rediff.com. . Retrieved 2011-02-11. [36] 10 Feb, 2011, 03.50AM IST,ET Bureau (2010-07-23). "Arrest of Balwa may trip DB Realty's rapid rise - The Economic Times" (http:/ / economictimes. indiatimes. com/ markets/ real-estate/ news-/ arrest-of-balwa-may-trip-db-realtys-rapid-rise/ articleshow/ 7464573. cms). Economictimes.indiatimes.com. . Retrieved 2011-02-11. [37] "Day after DB Realty chiefs arrest, ADAG scrips tank" (http:/ / www. indianexpress. com/ news/ Day-after-DB-Realty-chief-s-arrest--ADAG-scrips-tank/ 748266). Indianexpress.com. 2010-11-05. . Retrieved 2011-02-11. [38] Chowdhury, Anirban. "SpiceJet Denies Maran Buy Under Investigation - WSJ.com" (http:/ / online. wsj. com/ article/ SB10001424052748704364004576131651857350630. html?mod=googlenews_wsj). Online.wsj.com. . Retrieved 2011-02-11.
External links
Tehelka's January 2011 infographic explaining the scam (http://www.tehelka.com/channels/News/2011/jan/ 01/images/2GScamLarge.png) CAG Performance Audit report on the issue of Licenses and allocation of spectrum (http://cag.gov.in/html/ reports/civil/2010-11_19PA/Telecommunication Report.pdf)
License
Creative Commons Attribution-Share Alike 3.0 Unported http:/ / creativecommons. org/ licenses/ by-sa/ 3. 0/