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2G spectrum scam
From Wikipedia, the free encyclopedia To comply with Wikipedia's guidelines, the introduction of this article may need to be rewritten. Please discuss this issue on the talk page and read the layout guide to make sure the section will be inclusive of all essential details. (April 2011) This article may require cleanup to meet Wikipedia's quality standards. (Consider using more specific cleanup instructions.) Please help improve this article if you can. The talk page may contain suggestions. (April 2011) The 2G spectrum scam in India involved the issue of 1232 licenses by the ruling Congress-led UPA alliance[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 67,719 crore (US$15.1 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 176,379 crore (US$39.33 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]

Contents
[hide]

1 Civil Servants, Politicians and Corporations accused

1.1 Politicians, Ministers and Parliamentarians accused 1.2 Bureaucrats accused 1.3 Corporations accused 1.4 Media persons and lobbyists accused 2 Politicians, Ministers and Parlimentarians accused 3 Pranab writes to PM 4 Petitioners to 2G scam 5 Loss to Exchequer 6 Relationship between media and government o 6.1 Ratan Tata petitions over leak 7 Response to scam 8 Arrests and Chargesheets 9 Public Accounts Committee (PAC) 10 Impact on stock markets 11 See also 12 References
o o o o

13 External links

[edit] Civil Servants, Politicians and Corporations accused

All the accused have been booked under sections 120(B) (criminal conspiracy), 468 (Forgery for purpose of cheating), 471 (using as genuine a forged document or electronic record), 420 (cheating and dishonestly inducing delivery of property) and 109 (abetment if the act abetted is committed in consequence, and where no express provision is made for its punishment) of the Indian Penal Code.[5]

[edit] Politicians, Ministers and Parliamentarians accused

Andimuthu Raja, Union Cabinet Minister for Communications and: The Comptroller and Auditor General holds Raja personally responsible for the sale of 2G spectrum at 2001 rates in 2008, resulting in the previously mentioned loss of up to Rs. 1.76 lakh crores (US$40 billion) to the national exchequer.[6] In August, 2010, evidence was submitted by the Comptroller and Auditor General (CAG) showing that Raja had personally signed and approved the majority of the questionable allocations.[7] M. K. Kanimozhi, Member of Rajya Sabha: 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 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 Karunanidhi family-owned Kalaignar TV.[5] She has been charged with section 7 and 11 of the Prevention of Corruption Act. The sections deal with acceptance of alleged gratification.[8]

[edit] Bureaucrats accused

Siddhartha Behura, Civil Servant (IAS officer of 1973 batch UP cadre): He was the Telecom secretary who served in the DOT at the time of the 2G allocation. Pradip Baijal, Civil Servant (IAS officer of 1966 batch MP cadre): He is alleged to have recommended policies that favored certain Telecom companies when he was heading the TRAI. Post retirement, Baijal joined Noesis, a consulting firm.[9] [10] 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 visited by the Central Bureau of Investigation in December 2010 as part of their investigations.[11] However, Baijal is expected to get a clean chit in this issue.[12] R. K. Chandolia, Civil Servant (IES officer of 1984 batch cadre): 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 DDGaccess services A K Srivastava's room, had handed out letters of intent to representatives of various companies.[13]

[edit] Corporations accused

Aircel Airtel Allianz Infra[14] Dishnet Wireless Loop Mobile MTS India, formerly knowns as Sistema Shyam TeleServices Limited Reliance Communications S Tel Swan Telecom Tata Tele Services Unitech Group Videocon Telecommunications Limited Virgin Mobile India Vodafone Essar

[edit] Media persons and lobbyists accused

Nira Radia, a former airline entrepreneur turned corporate lobbyist whose conversations with politicians and corporate entities were recorded by the government authorities. The contents were later leaked by unknown parties creating the Nira Radia tapes controversy

Barkha Dutt, a journalist who works with NDTV also was involved in the lobbying of ministers in the government, but was not given any coverage or publicity in this matter by her fellow colleagues. Vir Sanghvi, a journalist who works with Hindustan Times was alleged to offer to stage a scripted and rehearsed interview with Niira Radia's client Mukesh Ambani.

[edit] Politicians, Ministers and Parlimentarians accused

Dayanidhi Maran, former Union Cabinet Minister for Textiles: The main allegation revealed by Tehelka magazine and followed up in several other reports, is that Maran forced C. Sivasankaran, owner of Aircel, to sell the telecom company to Maran's Malaysia-based friend T. Ananda Krishnan in 2006. The reports allege that Maran deliberately delayed issuing spectrum licenses to Aircel's sister concern, Dishnet Wireless, when it was owned by Sivasankaran. He issued the licenses soon after it changed hands to Ananda Krishnan who owns Maxis.[15] P. Chidambaram, current Union Cabinet Minister for Home Affairs : Subramaniam Swamy states that when the 2G Spectrum rate was finalised, P.Chidambaram was the finance minister of India and he had a major role in deciding the spectrum price with A.Raja. Subramaniam alleges that Chidambaram had received kickbacks and undervalued the spectrum cost.[16]

[edit] Pranab writes to PM

In August 2011, media revealed that, the Finance Minister Pranab Mukherjee, then External Affairs Minister, had written a letter to the PM Manmohan Singh in Dec 2007, that the spectrum allocation had to be done in a transparent manner and the norms have to revised. In the letter he had further said, it could lead to problems if a clearly stated policy and norms were not put in place.[17]

[edit] 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.[18] 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] so why the actions are not been taken yet.

[edit] Loss to Exchequer

The Controller and Auditor General of India used three different methods to assess the presumptive loss to the exchequer resulting from not auctioning 2G spectrum.[19] 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 67,364 crore (US$15.02 billion) The second method was based on the price recovered 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 176,000 crore (US$39.25 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 57,666 crore (US$12.86 billion) (based on Etisalat's investment in Swan Telecom) and 69,626 crore (US$15.53 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.[20] 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.[21][22]

[edit] Relationship between media and government

Main article: Nira Radia tapes controversy Media sources such as OPEN and Outlook reported that Barkha Dutt and Vir Sanghvi knew that corporate lobbyist Nira Radia was influencing the decisions of A. Raja.[23] The critics alleged that Dutt and Sanghvi knew about corruption between the government and the media industry, supported this corrupt activity, and suppressed news reporting the discovery of the corruption.[23]

[edit] Ratan Tata petitions over leak

The tapes leaked to the public include conversations between Nira Radia and Ratan Tata. Tata petitioned the government to acknowledge his right to privacy and demanded accountability for the leak, with the Minister for Home Affairs, CBI, Indian Income Tax Department, the Department of Telecommunication, and the Department of Information Technology as respondents in the petition.[24] On April 4, 2011 Indian Parliament's Public Accounts Committee (PAC)questioned Tata Sons Chairman Ratan Tata and corporate lobbyist Niira Radia regarding their roles in 2G Scam.[25]

[edit] Response to scam

In early November 2010 Telecom Minister A Raja resigned. In mid November the controller 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.[26] 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.[26] 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.[20][21] 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.
[27]

[edit] Arrests and Chargesheets

On February 2, 2011, the Central Board of Direct Taxes arrested former Telecommunications Union Minister Andimuthu Raja. The CBDT also arrested R.K. Chandolia, Raja's personal aide, and Siddharth Behura, the former Telecom Secretary.[28] [29] Both Raja and Chandolia are heard in conversation with Niira Radia in the released Radia tapes.now its being fraud causes On February 8, 2011, the CBI arrested Mumbai based Dynamix Balwas (DB) group managing director Shahid Usman Balwa in connection with the 2G spectrum allocation

scam. The CBI has evidence from the Income Tax department that Shahid Usman Balwa, considered close to Raja, was instrumental in channelling the kickbacks allegedly received by the former telecom minister.[30] On March 29, 2011, in Delhi, the CBI arrested Asif Balwa (younger brother of the arrested former Managing Director of DB-Etisalat Group, Shahid Balwa) and Rajeev Agarwal for their alleged involvement in money transfer to the Dravida Munnetra Kazhagam's (DMK) Kalaignar TV channel.[31] On April 2, 2011, the CBDT 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:[32] 1. 2. 3. 4. 5. 6. 7. 8. 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 9. Vinod Goenka, Director, Swan Telecom (now Etisalat DB) 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:[33] 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.[34] Second charge sheet filed by CBI has drawn severe criticisms for its inability or lack of intent for nailing the accused. "Timid and short on detail, the CBI chargesheet serves more as a lesson for students of law and police academies on how not to make a chargesheet. For starters, the chargesheet goes out of its way to offer a clean chit to the Prime Minister (4 pages), the attorney general (2 pages) and the Tatas (7 pages). It appears the CBI believes its brief is to defend these three as the accused rather than focusing on its real job of detailing criminal conspiracy, delivering evidence on corruption and filing charges, without favour or prejudice, against those in the government and the private sector who cheated the exchequer. The CBI has further defied the Supreme Court Order of 16.12.2010 which instructed it to investigate spectrum auctions between 2001 and 2006 and the grant of UAS licences. The CBI has walked over that entire period as if nothing happened ignoring the Justice Shivraj Patil OMC Report and the multiple statements and evidence provided by the government about the illegal issuance of new UAS licences since 2004 in violation of TRAIs recommendations and the Cabinet decision of 2003. None of the companies that were found ineligible in the CAG Report (85 of them) except Unitech have been chargesheeted. After so long, only Unitechs 22 applications have been evaluated but not the other 63...The CBI has carefully picked on some junior company officials as the prime accused. " CBI failed to find any instance of corruption and any evidence for the same. It also took on the role of auditor and recalculated loss figure to 30984.55Cr (without providing details)[35]

[edit] Public Accounts Committee (PAC)

The Public Accounts Committee (PAC), a 21 member committee chaired by Murli Manohar Joshi, investigated the 2G scam independently of the Joint Parliamentary Committee (JPC) and other committees. Joshi alleged that on April 28, 2011, during the last meeting of the PAC, ministers passed chits (notes) and called on PAC members to speak and behave in a particular manner, but only after a decision to question top officials like the Prime Minister's Office, Cabinet Secretary, Attorney General and Central Bank of India director. A minister reportedly commented that the PAC draft report will be thrown in the dustbin, to which the chairman regretted and questioned if Parliament's proposals and then Supreme Court orders would be given the same treatment. Defending his action of calling witnesses from

diverse fields in connection with the 2G scam probe, Joshi said it was the duty of the PAC to "trace and examine the way the money of [the] common man is spent".[36] On April 30, the chairman submitted a draft report to the Lok Sabha Speaker (Meira Kumar), and insisted that it be tabled in the Parliament. United Progressive Alliance (UPA) members claimed that a majority (11) MPs of the committee had rejected the report. Joshi termed this rejection as unconstitutional, claiming that rejection is impossible until the report is read and discussed by committee members.[36] On May 2, the speaker reappointed Joshi as the chairman of the PAC (whose term ended on April 30), despite the ongoing controversy regarding the status of the draft report. Soon after, the report was returned by the speaker. On June 28 the UPA thwarted an attempt by Joshi to present the draft before the PAC. On August 6, Joshi made a fresh attempt to represent the draft.

[edit] Impact on stock markets

The first casualty in Stock Markets once Raja was arrested was DB Realty.[37] 20% fall in the stock prices of DB Realty. Sun TV had its shares fall by 10%.[38] Sun TV COO refused the allegations. Swan Telecom Chief Balwa was arrested on February 8[39] and this led to rumours of links with Anil Ambani's Reliance ADAG and it led to 20% fall of his stocks . Its reported that nearly 2 Billion USD was eroded from his stocks .[40] Spicejet stocks went down after reports of investigation on Maran's recent takeover of Spicejet .[41]

[edit] See also

2010 housing loan scam in India Adarsh Housing Society Scam Belekeri port scam Commonwealth games scam Corruption Perceptions Index Indian political scandals Jan Lokpal Bill Rent seeking List of politicians in India charged with corruption

[edit] References
1. ^ a b "Subramanian Swamy moves SC for cancellation of 2G spectrum licences". The TImes of India. 2010-05-19. Retrieved 2011-05-06. 2. ^ "3G spectrum auction: Government collects Rs67,719 crore booty". DNA. 2010-05-19. Retrieved 2011-05-06. 3. ^ "CPM demands A Raja's resignation". The Times of India. 2010-11-05. Retrieved 2011-05-06.

4. ^ "Case Number". Courtnic.nic.in. Retrieved 2011-02-11. 5. ^ a b "Accused have been booked under sections". The Hindustan Times. 2011-04-25. Retrieved 2011-04-25. 6. ^ Singh, Shalini (28 October 2009). "BJP takes on Raja over telecom spectrum scam". Times of India. Retrieved 2009-11-08. 7. ^ Joseph, Josy (August 30, 2010). "CAG draft report nails Raja role in 2G scam". The Times Of India. 8. ^ "DMK takes a hit, Kanimozhi charged and summoned". Hindustan Times. April 25, 2011. 9. ^ taratv.com 10. ^ "Taming the retired". The Hindu Business Line. 2010-12-17. Retrieved 2011-02-11. 11. ^ "CBI conducts raids; swoops on DMK associates, Niira Radia & Pradip Baijal". economictimes.indiatimes.com. 12. ^ "Relief for Baijal". ndtv.com. 13. ^ "Who is R K Chandolia?". Ndtv.com. 2011-02-02. Retrieved 2011-0211. 14. ^ a b "Government, 11 telecom firms get court notice on 2G spectrum". sify.com. Retrieved 2011-02-11. 15. ^ "Dayanidhi Maran: 2g Scam". timesofindia.indiatimes.com. 16. ^ "2G scam: Chidambaram as guilty as Raja, claims Subramanian Swamy". indiatoday.intoday.in. 17. ^ "Pranab writes to PM". indiatoday.intoday.in. 18. ^ "2G scam: Why I filed a PIL against the telecom minister - Rediff.com Business". Business.rediff.com. Retrieved 2011-02-11. 19. ^ "Performance Audit Report on the Issue of Licenses and Allocation of 2G Spectrum by the Department of Telecommunications, Chapter 5". Comptroller and Auditor General of India. 20. ^ a b "Offence as Defence". Frontline. 2011-01-07. 21. ^ a b "2G scam: No public loss to exchequer, says Kapil Sibal". MoneyControl.com. 2011-01-11. 22. ^ "Tenth Five Year Plan, 2002-2007". Planning Commission. 2002-12-21. 23. ^ a b Amol Sharma (1 Dec 2010). "Wait a Minute, What Exactly Is Barkha Dutt Accused of?". IndiaRealTime. Wall Street Journal. Retrieved 4 December 2010. 24. ^ "Government orders probe into leaking of Niira Radia tapes". The Economic Times. 29 Nov 2010. Retrieved 4 December 2010. 25. ^ "PAC Quizzes Niira Radia, Rattan Tata in 2G Scam Probe". abclive.in. 26. ^ a b Joji Thomas Philip (18 Nov 2010). "2G scam: Govt to pull up five telcos". The Economic Times. The Times Group. 27. ^ "2G spectrum scam: CBI raids residences of A Raja - The Times of India". Timesofindia.indiatimes.com. 2010-12-08. Retrieved 2011-02-11. 28. ^ "CBI arrests ex-telecoms min A.Raja over graft". Reuters India. 2 February 2011. Retrieved 2 February 2011.

29. ^ PTI, Feb 2, 2011, 07.41pm IST (2011-02-02). "2G spectrum scam: Former telecom minister A Raja arrested - The Times of India". Timesofindia.indiatimes.com. Retrieved 2011-02-11. 30. ^ "CBI arrests DB group MD Shahid Balwa in 2G scam". Hindustan Times. 9 February 2011. Retrieved 9 February 2011. 31. ^ "CBI arrests Balwa's brother and another". Chennai, India: The Hindu. 30 March 2011. 32. ^ "CBI charges Raja, 8 others and 3 companies in 2G case". The Hindu Business Line. 2 April 2011. Retrieved 2 April 2011. 33. ^ "Kanimozhi charged with conspiracy in 2G scam by CBI". The Economic Times. 25 April 2011. Retrieved 26 April 2011. 34. ^ "2G scam: Kanimozhi in Tihar Jail after court rejects bail plea". The Indian Express. 20 May 2011. Retrieved 20 May 2011. 35. ^ "CBIs 2G chargesheet explains why Anna Hazare is on fast unto death". The Times of India. 07 April 2011. Retrieved 08 Sept 2011. 36. ^ a b "2G report's 'rejection' unconstitutional: Joshi" (in English). Rediff News. 2011-04-30. Retrieved 25 August 2011. 37. ^ "When DB Realty ended up dialling the wrong no - Money - DNA". Dnaindia.com. Retrieved 2011-02-11. 38. ^ "2G scam: The DB Realty-DMK puzzle - Rediff.com Business". Rediff.com. Retrieved 2011-02-11. 39. ^ ET Bureau (February 10, 2011). "Arrest of Balwa may trip DB Realty's rapid rise". The Economic Times. Retrieved 2011-02-11. 40. ^ "Day after DB Realty chiefs arrest, ADAG scrips tank". Indianexpress.com. 2010-11-05. Retrieved 2011-02-11. 41. ^ Chowdhury, Anirban. "SpiceJet Denies Maran Buy Under Investigation - WSJ.com". Online.wsj.com. Retrieved 2011-02-11.

[edit] External links

Tehelka's January 2011 infographic explaining the scam CAG Performance Audit report on the issue of Licenses and allocation of spectrum The Real Story About 2G Scam [hide]v d eCorruption in India

Politics Protests Indian anti-corruption laws and enforcement

List of politicians in India charged with corruption 2011 Indian anti-corruption movement Jan Lokpal Bill Right to Information Act Whistleblower protection in India Lokpal Lokayukta

International anti-corruption United Nations Convention against Corruption

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