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2G Spectrum Scandal: The way Raja robbed India

By janamejayan

New Delhi: The latest revelations on the 2G scam suggest a careful confluence
between the Telecom Ministry, when it was headed by A Raja, and a series of big
business houses.

“85 of the 122 licenses were issued to companies which suppressed facts, disclosed
incomplete information and submitted fictitious documents to DoT and thus used
fraudulent means of getting licenses and thereby access to spectrum” -this is one of
the more biting conclusions of the report prepared by the government’s auditor, the
Comptroller and Auditor General (CAG).

http://www.ndtv.com/video/player/news/2g-spectrum-scam-report/176068

The report – which was leaked to the media last week and forced Raja’s resignation
– was tabled in Parliament today. It is unflinching in its indictment of Raja, blaming
him for violating guidelines, indulging in favouritism and costing the government Rs.
1.76 lakh crores by giving away 2G spectrumn in 2008 at bargain basement prices
to inexperienced new players.

http://www.ndtv.com/article/india/what-is-2g-spectrum-scam-66418

The CAG report says Raja ignored the suggestions of the Law Ministry, the Finance
Ministry, and even the Prime Minister. “The PM had stressed on the need for a fair
and transparent allocation of spectrum….. Brushing aside the advice, the
Department of Telecom (DoT) in 2008 proceeded to issue licenses for 2G spectrum
at 2001 prices, flouting all rules and procedures.”

Companies that benefited from Raja’s twisted rules include Reliance Telecom (owned by
Anil Ambani), which was allocated spectrum ahead of the others. The Department of
Telecom, the report says, “did not follow its own practise of first-come first-served in
letter and spirit.”

The report also states that Swan Telecom was given undue advantage, and that it
served effectively as a front for Reliance. The charges in the CAG report are that
Swan should not have been considered for a license because Reliance
Communications held 10.71% stake in Swan – and according to the rules, a telecom
operator cannot own more than 10% stake in another telecom company operating in
the same service area . Reliance Telcom issued a statement this evening that
declares it did not have any shareholding in Swan when the license was granted
(the CAG report’s allegation is that Reliance owned stake when Swan applied for the
license).

Swan’s application should have been rejected initially by DoT, says the report.

The CAG report says that nine companies got more spectrum than stated in their
contracts. They include Bharti, Vodafone, Idea, BSNL, Reliance, and Aircel.

CAG indicts Unitech Wireless

Another big beneficiary of the 2G spectrum allocation was Unitech Wireless, which
had no experience in the telecommunication sector.

After Unitech got the license for a throwaway price of Rs. 1,661 crore, it sold 60 per
cent stake to Telenor Asia for a whopping Rs. 6,200 crore.

In its report, CAG indicts Unitech saying the high value paid by Telenor was for the
2G spectrum, and not for other inputs as claimed by Unitech. It also says that such
huge equity infusion, which should have accrued to the public exchequer, went as a
favour to the new licensees for enriching their business.

Speaking to NDTV, the telecom giant Telenor said that its investment in Unitech
Wireless conformed to all regulations. (Watch)

The political crisis continues

The stand-off between the government and the Opposition over 2G scam continues.
The Opposition wants a Joint Parliamentary Committee (JPC) to investigate the 2G
scam. The government has said there is no question of agreeing to this. (2G scam:
Opposition chants ‘we want JPC’; No, says Government)

Parliament has not functioned at all this winter session – the Opposition says it won’t
let the House get to work till a JPC is announced. (Watch: Let the law take its
course, says A Raja)

There were loud and angry scenes in Parliament once again today – the Lok Sabha
has been adjourned till Thursday, since tomorrow is a national holiday for Eid.

A lunch meeting with Opposition leaders called by Finance Minister Pranab

Mukherjee to try and end the deadlock, has ended without a breakthrough.
Mukherjee, who also met senior BJP leader LK Advani at the latter’s Parliament office
earlier, emerged from the lunch meeting to say, “We are for discussion. No solution
has been found yet. They want a JPC.”
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Lets us take you to the charges that are imposed on our former telecom minister Mr. Andimuthu Raja (New
Telecom Minister is Mr. Kapil Sibal who is also serving as Education Minister).
1. Cheap Telecom Licenses
• Entry fee for spectrum licenses in 2008 pegged at 2001 prices Mobile subscriber base had shot up to 350
million in 2008 from 4 million in 2001
2. No procedures followed
• Rules changed after the game had begun
• Cut-off date for applications advanced by a week
• Licenses issued on a first-come-first-served basis
• No proper auction process followed, no bids invited
• Raja ignored advice of TRAI, Law Ministry, Finance Ministry
• TRAI had recommended auctioning of spectrum at market rates
3. Favouritism, corporates encash premium
• Unitech, Swan Telecom got licenses without any prior telecom experience
• Swan Telecom given license even though it did not meet eligibility criteria
• Swan got license for Rs. 1537 crore, sold 45% stake to Etisalat for Rs. 4200 crore
• Unitech Wireless got license for Rs. 1661 crore, sold 60% stake for Rs. 6200 crore
• All nine companies paid DoT only Rs. 10,772 crore for 2G licences
Apart from this you must know that:
• A Raja then resigned as Telecom Minister after a glut of accusations over his alleged corruption and pivotal role
in the 2G scam. A lot of political drama followed thereafter, including the call of JPC (Joint Parliamentary
Committee) by the opposition.
• As the probe into the telecom scam grows in scope and scale, the Cabinet Secretariat has begun investigating
the nexus between senior bureaucrats and corporate lobbyists.
• You must have got to know about Nira Radia – Who is she? Here is the story, uncovered…
• Following the trails, corporate lobbyist Nira Radia was also questioned by Enforcement Directorate (ED)
officials. Her public relations and lobbying business includes Vaishnavi Corporate Communications, Noesis
Strategic Consulting Services, Vitcom Consulting, and NeUCom Consulting.
• The lobbyist is being questioned on several issues including the possible violation of the Prevention of Money
Laundering Act and her firms’ alleged links with some of the telecom companies that were allocated 2G
spectrum in 2008 by then telecom minister A. Raja. Tapes containing Radia’s conversations with Raja, some
industrialists and journalists have surfaced. The tapes were submitted as part of the evidence in a public
interest litigation regarding the 2G spectrum row in the Supreme Court.
• The transcripts even revealed the names of some well known journalists such as Vir Sanghvi and Barkha Dutt.
It is believed that the disgraced Telecom Minister A. Raja knew Radia for her immediacy.
• The Enforcement Directorate (which investigates foreign exchange violations ), CBI and income tax have been
on Radia’s trail for a while now. They have been examining the banking transactions, including cash
 withdrawals, of Radia and her firms to establish if she used money to influence those in decision-making
positions.
The CBI had said in an affidavit to the Supreme Court that the role of Radia would be examined in the 2G
spectrum allocation case in which irregularities were of “enormous magnitude” having international ramifications.