Big Trial, Big Verdict

2G Scam:

News Break:
Supreme Court cancels telecom licenses of 122 companies 04 Chidambaram gets brief reprieve from Supreme Court 07 UPA humbled: 9 implications of SC judgement on 2G licences 09 SC verdict on Swamys 2G plea is a slap on the wrists for PM 12 Uninor shocked by court ruling on 2G case 14 Banks in trouble after cancellation of 2G licences 15 2G licences: Why Bharti Airtel is the biggest gainer 17 2G licences: Videocon, Uninor, Tata Tele and Loop clear losers 19

The Reactions:
The 2G judgement is an indictment of NDA policies: Sibal 22 2G Trial: Industry reacts, says new entrants and foreign investment will be hit 24 Govts credibility under question after SC order on 2G: BJP 25 Judgement will make spectrum allocation transparent: Expert 27

Fighting the good fight:

Activism: Why Swamy gets it right and Team Anna wrong 29 Its a historic judgement: Prashant Bhushan 31 2Gs Dabangg manPrashant Bhushan 32

The Chidu connection:

Clash of the Titans: Will this be Chidambarams day out? 35 2G: PM, Chidu notings show they knew what Raja was upto 37

The first victim:

Rajas jail anniversary: After year in Tihar, cool facade withers 41 Anniversary: Raja completes one year in Tihar 44

News Break:

cancels telecom
licenses of 122 companies

Supreme Court

Among the telecom firms 11 companies have been severly affected. Nine licenses of Idea, three of Tata Tele, 21 licenses of Videocon, 22 of Uninor, 13 of Swap and 21 of Loop have been cancelled.
FP Staff, Feb 2, 2012

n a judgement that immediately sent some telecoms stocks tumbling and could further darken the business climate in India, the Supreme Court today, has cancelled 122 2G telecom licences granted post 2008 . It holds that 122 licences for 2G spectrum were granted in arbitrary and unconstitutional manner and has asked telecom firms to deposit bank guarantees. Among the telecom firms 11 companies have been severely affected. Nine licences of Idea, three of Tata Tele, 21 licenses of Videocon, 22 of Uninor, 13 of Swap and 21 of Loop have been cancelled. However, despite the cancellations, there may not be a huge disruption in telecom services as the number of licences granted post 2008 make up only 5 percent of the active subscriber base in India. In addition the supreme court has asked Unitech,S-TEL and Swan to pay Rs 5 crore as penalty, whereas Loop, S-Tel, Allianz and Sistema Shyam have been directed to par Rs 50 lakh as penalty for violating norms. Those who complied with the policy terms at the start, have not been penalised but it has gone against those firms that went against the eligibility criteria or those that violated licence norms.

sent telecom stocks down. Uninior and Videcon are two stocks that are likely to be impacted the most, whereas a large player like Bharti Airtel may gain from this move. DB Realty, which partnered with Etisalat to roll out telecom services, tanked over 7 percent after the judgement. 13 licences of Swan have been scrapped by the SC. Unitech plunged over 8 percent after the order as 22 of Uninor licenses have been scrapped. However, post the judgement it seems unclear if the telecom firms will go in for a fresh round of auctions. Analysts say that the worst apprehension of foreign companies like Norways Telenor, UAEs Etisalat and Russias Sistema have come true with this judgement. These companies had partnered with Indian firms and obtained licences by violating norms and will now have to pay a stiff price. Reacting to the judgement, Norways Telenor said it has been unfairly treated and was shocked with the Supreme Courts verdict to scrap telecom licences. We will study the order in detail and exercise all options available to ensure that Uninor continues to operate in India, Uninor, a joint venture between Telenor and Indias Unitech , said in a statement. Meanwhile, RCom clarified that the company will not be impacted by the Supreme Courts verdict as all licences have been obtained by or before 2001.Even Videocon said that most of its licenses had been granted before 2008 and will not affected much by the SC judgement. Citigroup in a report has said that the biggest losers will be new entrants like Swan, Uninor, Sistema. They added that BhartiAirtel will be the biggest gainer as there has been no cancellation of licences for them. Moreover, with the cancellation of licences a fresh auction will take place and those prices for spectrum will be taken as base for the excess spectrum. Jahannadhan Thunuguntla, head of research, SMS Investment and Advisors, Mumbai feels Bharti Aietel and Idea Cellular will emerge as popular brands and their strong balance sheets will be clear beneficiaries because they can take advantage of this situation and increase market share.

According to the verdict, telecom regulator TRAI will make fresh recommendations on the grant of licences. The government will take decision on licences one month post TRAI recommendation.Moreover, the telecom firms can operate the cancelled licences for another four months on a market rate payment. The Supreme Court judgement immediately

As far as the customers are concerned, they will have to port out to other service providers and here to large players like Bharti Airtel and Vodafone are likely to gain. Speaking to reporters, on the judgement delivered by the Supreme Court, Subramanian

Swamy said that the affected telcos have the option of paying the licence fee at market rate, adding that the verdict is the collective failure of the government of India. Meanwhile, SC has dismissed petition to probe Chidambrams role in the 2G scam.

Watch video: Customers wont be affected: TRAI on 2G order

Click here to see list of 122 Licences Issued on 10 January 2008

Supreme Court
The Supreme Court has said that the Trial court must decide on whether Chidambaram was involved in the allocation of 2G spectrum in 2008
FP Staff, Feb 2, 2012

Chidambaram gets brief reprieve from

he Supreme Court which delivered three landmark judgements pertaining to the 2G spectrum allocation case, has said that the trial court is perfectly competent to decide on the extent of then Finance Minister P. Chidambarams involvement in the scam. It has also given the trial court two weeks in which to deliver its verdict. The judgement was delivered in response to a petition filed by Subramanian Swamy. The case against Chidambaram, as made out by Swamy, relates to the claim that the decision on pricing of 2G spectrum was taken jointely by Chidambaram and Telecom Minister A Raja. Swamy has argued that Chidambaram should be made an accused in the case for his alleged

role in allowing two telecom firms Swan Telecom and Unitech Wireless to earn windfall profits by loading their shares to foreign firms. Swamys case is that Chidambaram is just as culpable as Raja, who completes one year in Tihar jail today, and that the two were party to the decision not to revise the entry fees for telecom players that was set in 2001. Speaking after the verdict was delivered Swamy said, I am perfectly satisfied with the decision of the court. I would have been dissatisfied only if they had said that I had no case. This verdict means that the CBI is perfectly free to investigate Chidambarams role in 2G spectrum allocation if they so choose.

Watch more in the CNN-IBN video below:

The fallout:

9 implications of SC
judgement on 2G licences

UPA humbled:

The SC judgment calling for the cancellation of all 122 licences issued by Raja in 2008 will have huge implications for the UPA and the telecom sector.
R Jagannathan, Feb 2, 2012

he Supreme Courts decision to cancel all the 122 telecom licences issued by jailed former Communications Minister Andimuthu Raja on 10 January 2008 will have wide ramifications. However, the affected licensees have been given a four-month window in which to negotiate with the government on renewing the licences by paying market-based prices for spectrum. The government will have to work out the modalities for this repurchase of spectrum. This decision, which will affect every major licensee from Reliance to Tata Teleservices, Idea, Bharti, Videocon, Aircel, Loop, Vodafone, S Tel and many others, including the controversial Swan Telecom and Unitech Wireless, has major political and economic implications. First, since the cancellation amounts to an indictment of the way Raja and the UPA government issued those licences, it is not only a setback for the former who is accused No 1 in the 2G scandal but a huge embarrassment for the government. The judgment, delivered by Justices AK Ganguly and GS Singhvi, is a stinging indictment of the UPAs governance record since the licence issuance process was a government decision even if Raja was the one to hijack it. Both PM Manmohan Singh and former Finance Minister P Chidambaram come off looking like weak players, unable to stop Rajas excesses. Second, two major companies Swan Telecom and Unitech Wireless, whose promoters are now being tried in the 2G scam have been singled out for punitive penalties of Rs 5 crore each in this case apart from losing their licences. This means their chances of continuing in business will be an uphill task. A third implication of the judgment is that many of the licensees may now seek a legal recourse raising the possibility of a prolonged policy paralysis caused by court cases. The fourth implication is that the licences that are cancelled will now have to be rebid for at higher market-based prices. This could automatically cause a reduction in the number of players in each telecom circle, since the less

serious players may now opt out. Fifth, since the short-term impact of the cancellation of licences is that the older licensees will have greater freedom of action in their established circles, telecom operators may be able to push prices up faster. So expect a hike in your mobile bills. Sixth, since the list of licences cancelled involves more players than the ones the Central Bureau of Investigation (CBI) has proceeded against, it means more companies may have to be probed by the CBI. Seventh, given the judgment, it seems improbable that future spectrum licences will be given only at market-determined prices or through auctions. This comes as a vindication for the Comptroller and Auditor Generals claim of a Rs 1,76,000 crore presumptive loss in the 2G scandal. It also rubbishes Kapil Sibals zero-loss claim in Rajas 2G licences. The cancellations, while they have no direct implications for the current trials underway against Raja, his cohorts, and various business executives from Reliance ADAG, Swan Telecom and Unitech group, raises the issue of the moral culpability of Rajas actions in January 2008. Eighth, since the then Finance Minister P Chidambaram and the Prime Minister were in favour of auctions of spectrum, but were still browbeaten by Raja to go with 2001 prices, it speaks poorly of their ability to defend the exchequers interests. Ninth, since the judgment will cause a rethink of the entire telecom policy, one can expect a huge slowdown in fresh investments in this sector. Foreign investment, particularly, will be cautious till the policy framework is clarified. The judgment means the new telecom policy announced by Communications Minister Kapil Sibal will have to be redrawn based on the courts judgment. It is back to square one.

Watch video:SC cancels all 122 2G licences given by A Raja

plea is a slap on the wrists for PM

The SC order that sanctions for prosecution against the corrupt should happen within 3 months is an indictment of the PMs 16-month inaction in the 2G scam petition of Subramanian Swamy.
R Jagannathan, Jan 31, 2012

SC verdict on Swamys 2G

n Tuesday, the Supreme Court delivered a verdict that empowers the ordinary Indian citizen to take on the corrupt. Among other things, the courts verdict, delivered by Justice AK Ganguly, said that any citizen of India can seek an enquiry or prosecution against people suspected of corrupt practices. When sanction had to be sought for a prosecution from government authorities, there has to be a timeframe within which this has to be given. The court deemed three months to be adequate for sanctioning prosecution of public servants or ministers. Swamy Politically, the judgment comes as a slap in the face of the UPA government, and especially Prime Minister Manmohan Singh, for the verdict is really a moral indictment of his inaction in the 2G scam. The case was brought by maverick Janata Party chief Subramanian Swamy seeking a direction to the PM to allow the prosecution of Andimuthu Raja in the 2G spectrum scam. The PM sat and sat on the prosecution and this is why the courts verdict on setting a finite timeframe for sanctions is direct indictment of his conduct in this issue. Consider what happened. On 29 November 2008, Swamy wrote to the PM seeking sanction to prosecute Raja for the 2G spectrum scandal. The PM did not reply till 19 March 2010 thats 16 months of sitting on his hands and when he replied he claimed that any sanction would still be premature since the Central Bureau of Investigation (CBI) was investigating the matter. The PM has not publicly stated the reasons for his silence or his inability to sanction the prosecution of Raja, but his arrest which happened a year later in February 2011 suggests that Manmohan Singhs failure to accord sanction gave the former communications minister more time to cover his tracks.

The judgment also means that governments cannot use the CBI as an argument to delay sanctions. This is the reason the PM gave to deny Swamy his right to prosecute Raja. The Supreme Court order essentially says that the PM (or any government authority that has to accord sanction for enquiry or prosecution) has to give a decision within three months, with an additional month given in case it requires the opinion of the attorney general. Thus, four months is the maximum time a government will have to delay corruption cases brought up by the public. In fact, the verdict is not just a vindication for Swamy, but the entire citizenry, since it empowers anyone to chase the corrupt. The Supreme Court order sets aside an earlier verdict of the Delhi High Court which declined to direct the PM to take a decision on prosecuting Raja. In overturning the high court, the Supreme Court said that the right to complain against a public servant under the Prevention of Corruption Act is a right under the Constitution. However, to make the right a reality, Parliament will still have to legislate it: what happens if the government does not sanction a prosecution within four months? The logical answer is that a new law will have to make it explicit that on the lapse of four months, sanction will automatically be deemed to have been given. But this law will have to be drafted and passed, and till Parliament acts citizens will still have to move the courts for action in corruption cases. Perhaps, this is the right comeback situation for Team Anna.
Watch video of the Supreme Court accepting Swamys plea against PMO

Uninor shocked

by court ruling on 2G case

The Indian joint venture of Norways Telenor said it has been unfairly treated and was shocked after the Supreme Courts verdict to scrap telecom licences.
Reuters, Feb 2, 2012

umbai: The Indian joint venture of Norways Telenor said it has been unfairly treated and was shocked after the Supreme Courts verdict to scrap telecom licences. The court revoked 122 telecoms licences issued under a scandal-tainted 2008 sale in a judgement on Thursday that could further darken the business climate in Asias third-largest economy. We will study the order in detail and exercise all options available to ensure that Uninor continues to operate in India, Uninor, a joint

venture between Telenor and Indias Unitech , said in a statement. Uninor has about 36 million subscribers in India. Earlier, RCom had clarified that the company will not be impacted by the Supreme Courts verdict as all its licences were obtained by or before 2001. Even Videocon said that most of its licenses had been granted before 2008 and the company will not affected much by the SC judgement.

Banks in trouble
after cancellation of 2G licences
With 122 licenses cancelled, the banks which have leant extensively to the telecom sector could be in deep trouble.
Rajanya Bose, Feb 2, 2012

elecom sector loans form 3 percent of the total banking portfolio. It makes up for 19 percent of infrastructure loans as well. The telecom sector has been under the radar for quite sometime. But with 122 licences cancelled, the banks which have leant extensively could be in deep trouble. A closer look at individual exposure Yes Bank has the maximum exposure in terms of percentage of loan book. Its exposure stands at 5 percent. Canara Bank, PNB, Axis Bank, Bank of Baroda, Oriental bank of Commerce, SBI, Corporation Bank and HDFC Bank have more than 1 percent of their loan book exposed to the sector. The lenders give money against the guarantee of the licence. When licences are cancelled the underlying asset is no more and the loan will in all probability will turn into a bad asset.

For example, Yes Bank could have its exposure to an incumbent telecom company and therefore might face no threat to its portfolio. In that case, bank exposures have to be examined at an individual basis to understand the real threat.

Moreover, banks which have exposure to the equipment suppliers in the telecom space will also suffer as their loan repayment will be in jeopardy now. Punjab National Bank, CNBC Tv 18 reports has exposure to all the companies whose licences have been cancelled. The stock is down 3 percent. SBI which also has significant exposure to the sector has said they have lent to strong companies and will now work out how costs can be recouped with individual companies. For now, some other bank stocks have reacted negatively to the judgement. Yes Bank is down 1 percent, SBI is down 3 percent, Axis Bank is down 1.7 percent.

The percentage of loan book exposure to the sector however does not necessarily signal a corresponding percentage threat to the bank.

the biggest gainer

With licences of small players being cancelled, Bharti Airtel can take advantage of excess spectrum and increase market share.
FP Staff, Feb 2, 2012

Why Bharti Airtel is

2G licences:

harti Airtel seems to have come out clean and is likely to be the biggest beneficiary from the judgement announced by the Supreme Court. As a result of the judgement, 4.4 Mhz of 2G spectrum per circle has been freed which results in freeing up of almost 55 Mhz of spectrum. One has to wait and see how these licences are auctioned and at what price. Smaller telecom companies were making inroads in the market share of bigger companies by aggressively pricing their services. Most of the smaller companies are making operating losses as a result of this pricing strategy. This has resulted in a reduction in margin and lower client addition for most of the players in the sector.

Bharti already has the highest number of subscribers in the country. The company as on December 2011 had 175.65 million subscribers in its fold, however, its monthly addition was slowing down. Take the case in December, while Bharti Airtel added 0.96 million subscribers, Uninor added 2.12 million. With licences of Uninor being cancelled, both Idea and Bharti are expected to benefit from the judgement as number portability can help clients to switch easily. Citigroup in a report has said that the biggest losers will be new entrants like Swan, Uninor, Sistema. They added that BhartiAirtel will be the biggest gainer as there has been no cancellation of licences for them. Moreover, with the cancellation of licences a fresh auction will take place and those prices for spectrum will be taken as base for the excess spectrum. Jagannadhan Thunuguntla, head of research, SMC Investment and Advisors, Mumbai feels Bharti Airtel and Idea Cellular will emerge as popular brands and their strong balance sheets will be clear beneficiaries because they can take advantage of this situation and increase market share. The stock gained around 7 percent at Rs 386 on likely allocation of spectrum. The shares touched an intraday high of Rs 392.95 and an intraday low of Rs 358.30. It was trading with volumes of 959,155 shares.

Though the smaller companies can operate for another four months, it is likely that Bharti and Idea might opt for raising tariffs for its services as the threat of competition would no longer exist.

Videocon, Uninor, Tata Tele and Loop

2G licences:

clear losers

The judgement impacts a series of smaller and new telecom companies which were eating into the market share of the bigger companies.
FP Editors, Feb 2, 2012

eacting to the Supreme Courts decision of cancelling 122 licences issued to 11 companies post January 2008, shares of Bharti Airtel trade 7.7 percent higher at Rs 386.8. The Supreme Court s decision not only frees the much needed spectrum but also reduces the competition in the sector. Bharti Airtel trades 7.7 percent higher at Rs 386.8 as a result of this judgement. The judgement impacts a series of smaller and new telecom companies which were eating into the market share of the bigger companies. Smaller and newer players were adopting an aggressive policy to grow, which were affecting the margins of players like Bharti . Among the companies that have been affected are Idea Cellular (9 licences), Tata Tele (3 licences), Videocon (21 licences), Uninor (22 licences), Swan (13 licences) and Loop (21 licences). Idea Cellular is trading 4 percent down at Rs 89 reacting a bit late to the news It was trading 4 percent higher at Rs 96.65 after the judgement came in; while Unitech, the shareholder in Uninor, is down 7 percent at Rs 25.05. Reliance Communication trades 4 percent lower at Rs 96.25 and DB Realty trades 5.5 percent lower at Rs 59.20. Videocon Industries is down 1 percent at Rs 171.35.

The companies whose licence have been cancelled have been given a four-month period to work out an arrangement with TRAI (Telecom Regulatory Authority of India). As a result of the judgement, 4.4 Mhz of 2G spectrum per circle has been freed which results in freeing of almost 55 Mhz of spectrum. One has to wait and see how these licenses are auctioned and at what price. The Supreme court judgement also makes it clear that the policy of granting license at first come first served basis could be wrong and now the auhtorities could after some other companies whose name had bnot been mentioned till now. The Chinese and European operators who had leased out equipments to the telecom companies will also suffer. The worst in the gropu are the telecom companies who were granted all licenses after 2008, which means companies like Swan, Loop, Uninor. The incumbents like Bharti are slated to gain by reduced competition. Finally, the bankers who had lent to some of these names might also face problems. State Bank of India is already down 4 percent, PNB is down 1.8 percent, Central Bank of India is down 1.2 percent, IDBI is down 3 percent.

The Reactions:

NDA policies: Sibal

The Congress said that the judgement canceling 122 licenses was a judgement of the telecom policy and not the government.
FP Staff Feb, 2, 2012

The 2G judgement is an indictment of

he Congress on Thursday welcomed the Supreme Court judgement cancelling 122 telecom licences, and justified its stand on the 2G spectrum row by saying, uncertainty that shrouded that telecom sector has finally been lifted by the supreme courts judgement today. Addressing a press conference after the BJP attacked the Prime Minister and the Finance Minister in their role in 2G spectrum allocation, Telecom Minister, Kapil Sibal came out in defence of the government and said, The Supreme Court judgement has indicted the policy, it hasnt indicted the finance minister or the prime minister. The government will abide by the judgement that spectrum should be auctioned which, he said, the ministry has done by delinking spectrum from the licence in 2011 after he took over. Sibal maintained that the government followed the policies framed by the NDA government, which the UPA succeeded, while defending his zero-loss theory. If the policy was right there was no loss, if the policy was flawed then theres been revenue loss since 2003, he said, The SC decision says that the policy was per-se discriminatory, which means the first-come first-serve policy was flawed. These policies were framed during the NDA regime.

Sibal challenged the BJP to come forward and accept its part in the present crisis saying, UPA only followed the policy of the NDA government of FCFS, which has been declared discriminatory by the apex court. The BJP, therefore, must apologise to the nation from the nation for causing huge loss to the government. While blaming the NDA for the 2003 policy which the UPA implemented, he sought to shift blame on irregularities in the manner in which it was implemented on the then telecom minister A Raja. The Supreme Court has clearly said that the then minister (Raja) did not heed to the good advise of both Prime Minister Manmohan Singh and the Finance Ministry, Sibal said. The BJP-NDA should apologize for their rhetoric against Chidambaram even after SCs verdict, he said. He added, The judgement will ensure that no policy aberration happens in the future.

says new entrants and foreign investment

2G Trial: Industry reacts,

will be hit

India Inc and analysts in the telecom industry see the cancellation of 122 telecom licences by the Supreme Courts as a huge setback for the sector and for foreign investment in the country.

Rajanya Bose, Feb 2, 2012 Head of research at Mumbais SMC Investments and Advisors Ltd, Jagannadham Thunguntla, agreed with Sahai. Foreign players like Systema and Etisalat, which are government controlled companies those governments will start feeling apprehensive about doing business in India and hence, drawing foreign direct investment would be little more challenging for the country, Thunguntla said. However he was of the view that big players like Bharti Airtel and Idea Cellular, which had strong balance sheets would be the beneficiaries of this verdict. Citigroup too in a report has said that while the biggest losers will be new entrants like Swan, Uninor and Sistema, players like Bharti Airtel will be the biggest gainers, expecially since there has been no cancellation of licences for them. Speaking to Firstpost, Prashant Bhushan, member of Team Anna, said the judgement would set a huge precedence in time to come. It is a very very good salutary judgement and this judgment establishes a huge precedent for time to come It establishes that no corporate group or any private entity cant be benefited out of illegal deal or act, he said. In the case of Unitech and Swan, the Supreme Court has asked them to pay Rs 5 crore each as fine in this case.

umbai: India Inc and analysts in the telecom industry see the cancellation of 122 telecom licences by the Supreme Courts as a huge setback for the sector and for foreign investment in the country. Indias Supreme Court today revoked 122 telecoms licences issued under a scandal-tainted 2008 sale in a judgement that could further darken the business climate in Asias third-largest economy. Even as RCom said that the company will not be impacted by the Supreme Courts verdict since all its licences were obtained by or before 2001 and Videocon too was of a similar view, Uninor the Indian joint venture of Norways Telenor with Unitech said it has been unfairly treated and was shocked after the Supreme Courts verdict to scrap telecom licences. Rishai Sahai, director at consultancy firm Cogence Advisors in New Delhi said this was terrible news for foreign investors. It is very bad news. What mistake did they do? he said of overseas investors like Telenor, adding, They partnered with Indian companies, invested lots of money and followed the process of that time. Sahai said that the natural consolidation one would have expected to happen in the sector, which would have weeded out the weak players, is out of the way now. This creates very bad impression about the government in the overseas markets, he said.

Govts credibility under question after SC order on 2G: BJP

BJP today described the Supreme Court decision on 2G scam as one which raises serious questions on the credibility, transparency and integrity of the UPA government.
PTI, Feb 2, 2012

JP today described the Supreme Court decision on 2G scam as one which raises serious questions on the credibility, transparency and integrity of the UPA government and demanded the resignation of Home Minister P Chidambaram for his alleged role in it. It also said that after the order, Prime Minister Manmohan Singh cannot escape the political responsibility as he is head of the government. The 2G scam is the biggest scam since Independence. The entire country was deeply agitated and shocked over it. But Prime Minister Manmohan Singh and Union ministers Kapil Sibal and P Chidambaram defended the 2G spectrum allocation inside and outside Parliament and stated there was no wrongdoing, BJP chief spokesperson Ravi Shankar Prasad said. Addressing a press conference in Lucknow, Leader of the Opposition in the Rajya Sabha Arun Jaitley said even after CAG pointed to wrongdoings, government had defended then Telecom Minister A Raja. The Prime Minister had said Chidambaram is his valued colleague and what he did is right. That decision of the government to allot 2G licences has been declared illegal and unconstitutional by the highest court of the countryIt was not the decision of one person but the decision of the government, he said. The BJP said after the controversy over the appointment of PJ Thomas as CVC and the issue of prosecution sanction in 2G case, the quashing of licences by the apex court today is the third issue on which the role of PMO has been criticised.

This repeatedly demonstrates that many major decisions have not been taken in a fair, transparent and just manner, the partys Chief Spokesperson Ravi Shankar Prasad said in Delhi. The decision has smashed the PMs theory that past practices were followedThe SC decision also smashes the theory of Telecom Minister Kapil Sibal that there was zero loss in 2G allocation, Jaitley said. He said Chidambaram had given consent to the 2G allocation and all those involved in the issuance of licences were answerable not only politically and morally but legally also. Chidambaram himself must consider his continuance as Home Minister as untenable, he said. Prasad claimed that as the Supreme Court has directed that the matter against Chidambaram be considered by the special court, the sword remains hanging over his head and his position has become untenable. The sooner he resigns, the better it would be. Prasad said the opposition also demands clarifications from the PM, UPA Chairperson Sonia Gandhi and Congress General Secretary Rahul Gandhi on the 2G issue after the judgement. Will the PM take some accountability or keep silent as always? Will Sonia Gandhi and Rahul, the two most powerful leaders in the Congress, speak about massive corruption in this government or maintain a conspicuous silence. The nation demands an answer, he said.

Watch more in the CNN-IBN videos

spectrum allocation transparent: Expert

Expert Mahesh Uppal said that 2G spectrum is still valuable although it might be costing Rs 1.76 lakh crore as the CAG comprehends it to be.
FP Staff, Feb 2, 2012 eacting to the Supreme Court order today on the cancellation of 122 licenses issued in the 2G spectrum, telecom expert Mahesh Uppal said that the order will bring in more transparency in the allocation process. It is a good news for the incumbents, that is, the older players in the sector. They will have more spectrum and less competition now, Uppal said. The expert said it will be interesting to note if the players whose licenses got cancelled will bid for the spectrum again. Uppal said that it is good that the apex court stood up for transparency and fair value and this will allow investors to have faith in the process.

Judgement will make

The telecom expert denied that 2G is an outdated spectrum now. 2G is still in great demand. It is valuable and scarce. It is required even to continue existing services, he said. However, Uppal doubts whether reauctioning the 2G spectrum, will bring the figure of Rs 1.76 lakh crore that the Comptroller and Auditor General said was the loss to the exchequer due to the alleged scam in 2008. The auction will help clarify about the market perception of the actual value of the spectrum. But I doubt if it will anywhere to the CAGs figure of Rs 1.76 lakh crore, Uppal said.

Fighting the good fight:

Why Swamy gets it right

Activism:

Team Anna wrong

Popular support is no replacement for knowledge and determination in pursuing a goal.
Akshaya Mishra, Feb 2, 2012

and

es not one of the most likable people around. He neither has a popular base as a politician, nor a dedicated following in the intellectual class. He is known to be as much a danger to enemies as to friends. He is ambitious but too fickle; he loves to fight the good fight and make it bitter and personal but theres no apparent sense of purpose in the exercise. But what makes Dr Subramanian Swamy so effective as a crusader? Knowledge, should be the one-word answer. Extended a bit, it is his ability to work out the beguiling nuances in the functioning of institutions correctly and framing the problem areas as legal questions. If he has been successful in forcing the PMO or Home Minister P Chidambaram into the legal wringer the consequence might be politically disastrous for the latter the credit goes to his dispassionate intellect. With this handy, he does not need the media to back him or frenzied men on the street cheering him on. He works within the system and finds solutions to its problems within the system. The Supreme Court order on automatic sanction for persecution of officials in cases of graft is a huge a step forward in fighting corruption in bureaucracy. It yanks off the shield protecting corrupt officials. The next step should be attachment of property of such officials. Unfortunately, the importance of the order was reduced to whether it was a slap on the PMs face. There has been a similar apex court order earlier but the credit of reviving it must go to Swamy. On Thursday, the Supreme Court besides cancelling the 122 2G licenses issued in 2008 by then Telecom Minister A Raja, left the issue of whether P Chidambaram should be probed by the CBI in the 2G case to the trial court. The home minister gets a breather but the sword of prosecution keeps hanging on his head. It also leaves the entire government on tenterhooks. Isnt such court action a huge disincentive for corrupt practices in big deals?

It is certain that by the end of the 2G trial, a strong mechanism will be in place to address corruption in high places, particularly in issuing licences. The political class graft is not a Congress-specific or BJP-specific problem, its a common trait among all parties will be suitably chastened and forewarned against indulging in corrupt activities. Swamy, though he is not the only one to go after 2G irregularities, must get due credit here too. What makes his fight stand apart? Well, he is clear on how to go about it. He does not suggest fancy ideas outside the arrangement of institutions like the Lokpal of Team Anna but still remains an agent of change. He appears convinced that governments caught as they are with their own vested interests wont bring change, courts would. And, it helps that he is thorough in legal matters and can easily catch foul play by opponents. The background noise the media, popular support is irrelevant in his fight. They are a distraction from the main cause. If only Team Anna understood it! Threats and blackmailing tactics dont bring changes, the power of persuasion does. The Right to Information Act, a game-changing legislation in ensuring transparency in governance, was the result of the dogged effort of Arvind Kejriwal, now a vocal member of Team Anna. The passage of the Act and the lengthy deliberation preceding it was not a high profile media affair. But the effort was purposeful and the result is visible for all. In both cases, the approaches are different but they deliver the results. Swamys small victories are a big lesson in activism. His intentions might be spurious he is selective about his targets and his offensive does not follow a principled position on issues but so long as they deliver the right results it should be nobodys concern.

Its a historic judgement: Prashant Bhushan

Team Anna member and an SC lawyer Prashant Bhushan hailed todays SC judgement on the 2G trial as historic.
FP Staff, Feb 2, 2012 elhi: Minutes after the Supreme Court (SC) of India cancelled 122 telecom licenses under the 2G technology, given by former telecom minister A Raja, Team Anna member and an SC lawyer Prashant Bhushan hailed the judgement as historic. This judgement will go down the history and will change the way cases of corruption will be investigated in this country, Bhushan said. Speaking to Firstpost Bhushan said, It is a very very good salutary judgement and this judgment establishes a huge precedent for time to come. It establishes that no corporate group or any private entity cant be benefited out of illegal

deal or act. By slapping a market price on the telecom companies, the Supreme Court ensures that the loss to the public exchequer is met by making these telecom companies pay market price Huge judgment indeed. Apart from cancelling telecom licenses, the SC has asked the govt to ensure the these cancelled licenses are auctioned in a span of four months. The court also asked the CBI, which is investigating the case, to file regular updates on its investigations with the CVC, which will monitor the case and keep the courts updated on the issue.

2Gs Dabangg manPrashant Bhushan

He is fighting a crucial PIL in the 2G spectrum allocation case. If you ask anyone in Delhis legal circles about Prashant Bhushan, they will tell you one thing The man means business and if you are on the wrong side of the law, then he will come after you.
Meenal Dubey, May 10, 2011

ollywood often churns out stories of a middle class hero taking up cudgels fearlessly against the rich and the mighty. In real life though, there are few like the Delhi-based lawyer and activist Prashant Bhushan. He is fighting a crucial public interest litigation (PIL) in the 2G spectrum allocation case. An outcome in his favour, many powerful people will see the insides of a jail for the first time in their lives. If you ask anyone in Delhis legal circles about Prashant Bhushan, they will tell you one thing The man means business and if you are on the wrong side of the law, then he will come after you. The name Bhushan is synonymous with fear for corrupt judges, politicians, bureaucrats and now corporate honchos, says a top Supreme Court lawyer. Unlike many well-heeled lawyers of the Supreme Court, Bhushan is known to have turned down fees worth crores and remuneration like large tracts of land for defending a guilty person. If he has taken up your case, then it means that he is convinced of your innocence and will fight tooth and nail to prove it, the lawyer adds. His contemporaries also acknowledge that Bhushan refused to charge a penny for the needy and won their cases. A former alumnus from St. Josephs College Allahabad, he joined IIT, Madras, in 1973. However, he left a year later and pursued a BA programme with Philosophy, Economics and Political Science. Thereafter, he went to Princeton University and completed his Masters in Philosophy in 1982. A year later, he returned to India and enrolled as an advocate. Bhushan has worked on 500 public interest litigations (PIL) in a career span of 15 years and the figure has only grown over the last few years. Many say that he has inherited this streak for justice from his renowned father and Indias former law minister Shanti Bhushan, who has

been named on the panel for the Jan Lokpal Bill. Many high-profile cases have seen the appearance of Bhushan. These include the Niira Radia tapes, Narmada Bachao Andolan, Bofors, the contempt of court case against Arundhati Roy, Enron, the Right to Information Act, and the oil companies disinvestment case. At a time when PILs are filed on anything from the name of a Bollywood film to a serious cause, his principles and upright approach to law have earned him the formidable reputation of a man not to be taken lightly. I think the general public is fed up of the corruption and the callousness of our enforcement agencies and politicians who are a part of it, he said. He argues that there is no need for fear if one is on the right side of law. With the spotlight on him after his petition demanding the prosecution of the likes of Ratan Tata, Anil Ambani, and Sharad Pawar in the 2G scam, he appears remarkably cool and collected. I will never ask the government for protection because I know that the accused can only try to malign my reputation. They will not harm me, Bhushan assures. An avid badminton player, Bhushan does not get too much time for watching sports on television but he likes to indulge himself in an occasional Bollywood or Hollywood flick. Unlike other rich and powerful lawyers, Bhushan prefers to keep a low profile. He avoids glitzy parties and is most comfortable in his nonbranded regular clothes and shoes. Post the 2G spectrum case, Bhushans primary preoccupation is the Jan Lokpal Bill. While he would like to holiday with wife and sons for the summer break, he knows there will be no holiday this year. But then, no regrets, comes the cheerful reply.

The Chidu connection:

Clash of the Titans: Will this be Chidambarams

day out?

Like two ageing boxers, Subramanian Swamy and P Chidambaram have been slugging it out for decades. Will the knockout punch be delivered today?
Venky Vembu, Feb 2, 2012

n 1977, soon after the Janata Party had come to power, P Chidambaram, then a young and upstart lawyer from Tamil Nadu who held radical left views on the economy, happened to meet his former Harvard tutor Subramanian Swamy, another keen legal mind who too hails from Tamil Nadu. The young lawyer, all full of beans and a clipped accent, bounded up to the master, who had by then become quite a political celebrity, and introduced himself as one of the others students. But, curiously, the Harvard don had not the faintest recollection of the uppity student. Years later, Swamy recounted that encounter thus: He (Chidambaram) said he was my student at Harvard. I dont recall that. I guess he must have been a poor student. If he had been a good student, I would have remembered him. P Chidambaram In the years since then, Chidambaram has given Swamy sufficient reasons to refresh his memory. The political trajectories that the two took have put them frequently on a collision course, with each looking to outmanoeuvre and politically vanquish the other. Oftentimes the Clash of the Titans escalated beyond personal animosity and had a bearing on the destiny of elected governments and, occasionally, even the country. Like weary boxers, both have been slugging it out, with neither being able to deliver the knockout punch. But Swamy perhaps reckons that the final crushing blow will be delivered in court today. At 10.30 am today, the Supreme Court will deliver its verdict on three key aspects of the 2G scam case, including one on a petition by Swamy and others seeking a CBI inquiry into Chidambarams alleged role in fixing spectrum price when he was finance minister in 2008. If the court rules that Chidambarams role should be investigated, it would be politically untenable for him to remain as Minister. This could be his day out of office. Additionally, the court will decide if a Special

Investigation Team (SIT) should continue to oversee the CBI investigation into the scam, and whether the tainted 2G licences should be cancelled. The case against Chidambaram, as made out by Swamy, relates to the claim that the decision on pricing of 2G spectrum was taken jointely by Chidambaram and Telecom Minister A Raja. Swamy has argued that Chidambaram should be made an accused in the case for his alleged role in allowing two telecom firms Swan Telecom and Unitech Wireless to earn windfall profits by loading their shares to foreign firms. Swamys case is that Chidambaram is just as culpable as Raja, who completes one year in Tihar jail today, and that the two were party to the decision not to revise the entry fees for telecom players that was set in 2001. The government has argued that Chidambaram had no role in fixing the price or in granting the licences, and that Chidambaram had always argued in favour of auction to determine entry fees, and grant licences and spectrum. It has blamed Raja for the scam But the Supreme Court has also taken on record a finance ministry note to the Prime Ministers Office issued on 25 March 2011 and signed by Pranab Mukherjee, which appeared to suggest that the scam could have been averted if Chidambaram had favoured an auction of the spectrum, rather than a first-come-first-served allocation. After a cold war broke out between Chidambaram and Mukherjee, the latter clarified that the note was a background paper, and that it contained certain inferences and interpretations which do not reflect my views. In any case, all those legal minutiae will be finally up for verdict today. It promises to be a day of high courtroom drama. But beneath all that, the personal battle between Swamy and Chidambaram between master and pupil will also be settled today.

2G:
PM, Chidu notings show

Raja was upto

Who was responsible for the telecom licences? Was it only Raja? Or did the PM and then FM P Chidambaram also have a role?
Raman Kirpal, Feb 2, 2012

they knew what

he cancellation of 122 telecom licences by the Supreme Court raises the big question: who was responsible for it? Was it only the then Communications Minister Andimuthu Raja? Or did the prime minister and then Finance Minister P Chidambaram also have a role? Below, Firstpost reprints the exact statements and notings of key players in 2007-08. From these you can make your own judgments. Given below are the statements made by the PM, Chidambaram and Raja himself at various points of time before the licences were issued on 10 January and after. Prime Minister Manmohan Singh (In a letter to A Raja on 2 November 2007): A number of issues relating to allocation of spectrum have been raised by telecom sector companies as well as in sections of the media. I would request you (A Raja) to give urgent consideration to the issues being raised with a view to ensuring fairness and transparency and let me know of the position before you take any further action in this regard.

DS Mathur, Secretary, Telecom, in his letter to the Prime Ministers Principal Secretary TKA Nair on 6 November 2007 Department of Telecom has taken decisions to work out revised subscriber-based spectrum allocation criteria and processing of pending applications, etc, for grant of Unified Access Services Licences (UASL). The above decisions have been publicised for information to public through Press Release. A Raja, in his letter to the Prime Minister and then External Affairs Minister Pranab Mukherjee on 26 December 2007: Kindly refer to my letters dated 2.11.2007, and subsequent personal discussions with you (Manmohan Singh) on various issues related to telecom sector. As discussed with you and I also had several discussions with the External Affairs Minister (Pranab Mukherjee), who is also heading GoM (Group of Ministers) on vacation of spectrum on these issues DoT follows a policy of first-cum-first-served for granting LoI (letter of intent) to the applicants for UAS licence, which means, an application received first will be processed first and, if found eligible, will be granted LoI Since the file for issue of LoI to all eligible applicants was approved by me on 2-11-2007, it is proposed to implement the decision without further delay and without any departure from existing guidelines. As I have already promised to you, my efforts in this sector are intended to give lower tariff to the consumer and to bring higher tele-density in the country, more specifically in rural areas. In these circumstances, the discussions with the External Affairs Minister and Solicitor General of India have further enlightened me to take a pre-emptive and proactive decision on these issues as per the guidelines and rules framed thereunder to avoid any further confusions and delay. Prime Minister Manmohan Singh in his letter to A Raja on 3 January, 2008 I have received your letter of 26 December, 2007 regarding recent developments in the tel-

A Raja in his reply to the Prime Minister on 2 November 2007: I have already written to you a letter earlier today clarifying the position on (the) processing of large number of applications received for fresh licences. Before giving clarifications to the averments contained in the Annexure to your letter, I would like to inform you that there was, and is, no single deviation or departure in the rules and procedures contemplated, in all the decisions taken by my ministry and I further assure you the same in future also.

ecom sector. With warm regards. Pulok Chatterjee (who was in the PMs Office), in a letter dated 31 December 2007 toTKA Nair, just 10 days before Raja rolled out 122 letters of intent (LoI) on 10 January 2008. As directed by Principal Secretary (TKA Nair), I have prepared a comprehensive chart that gives various recommendations on each issue. The last column gives certain suggestions. Principal Secretary may like to see. PM Manmohan Singhs Noting (written by TKA Nair) on Pulok Chatterjees draft Note: PM says the DoT (Department of Telecom) has issued licences today. That may be taken into account and the issues accordingly modified and submitted to him please.

forwarded to him for consideration on the basis of individual consultations with the main players and Trai. PM wrote (says TKA Nair) on Puloks note on 23 January 2008: PM wants this informally shared with the Deptt (Departments). Does not want a formal communication and wants PMO to be at arms length. P Chidambaram, in his letter dated 15 January 2007 to Prime Minister Manmohan Singh after awarded the licences: This leaves the question about licensees who already hold spectrum over and above the startup spectrum. In such cases, the past may be treated as a closed chapter and the payments made in the past for additional spectrum (over and above the startup spectrum) may be treated as the charges for spectrum for that period. For the future, however, Chidambaram offers auction of spectrum in the same 15 January letter: Spectrum is a scarce resource. The price for spectrum should be based on its scarcity value and efficiency of usage. The most transparent method of allocating spectrum would be through auction. The method of auction will face the least legal challenge. If government is able to provide sufficient information on availability of spectrum, that would minimise the risks and, consequently, fetch better prices at the auction. The design of the auction should include a reserve price. Chidambaram wrote the above paragraph in bold letters to Manmohan Singh.

Pulok Chatterjee added two more points, as enunciated by DoT, in his note on the advice of the PM and again submitted his `draft note on 15 January 2008: The outlines of the above suggestions may be

The first victim:

Rajas jail anniversary:

After year in Tihar, cool facade withers

Andimuthu Raja, prime accused in the 2G scam, has completed a year in custody. He stills plays the perfect politician, but his attempts to stay cool are beginning to fail.
Raman Kirpal, Feb 2, 2012

ew Delhi: 16 February 2011. It was Andimuthu Rajas last day in Central Bureau of Investigation (CBI) custody. He had been arrested 14 days before on 2 February in connection with his alleged role in the 2G spectrum scam. On the eve of his shift to judicial custody in Tihar jail, a senior CBI official asked Raja if he, like other VIP undertrials, would seek to shift to a hospital under some medical pretext or the other. Raja said: No. I will never like to lose public sympathy. I am a politician. That statement explains how Raja has been handling his incarceration and ignominy. Today, a year later, Raja has looked the law in the face and refused to blink. Unlike other undertrial politicians, he never opted for hospitalisation on medical grounds. He continues to smile and pretend everythings normal, especially when a horde of camerapersons chases him around the courtroom at Delhis Patiala House during his ongoing trial. Even under the harshest media glare, Raja plays his cards well by trying to pose as a political victim. But for his adversaries, he has nothing but harsh words and contempt. He called Comptroller and Auditor General Vinod Rai an illiterate who didnt know anything about law. He said the CBIs chargesheet against him was nonsense. And he declared that Prime Minister Manmohan Singh and then Finance Minister P Chidambaram knew all about his allocation of 2G spectrum to 122 companies. He even promised that he would drag the PM to the witness box, if the trial in the 2G scam went against him. So what is Rajas game? An astute politician, Rajas strategy is about posing as the target of political vendetta. He likes to remind people that there are no criminal charges against him. But he knows that the CBI has thrown the whole book at him. They have charged me with everything, Raja told his wife in Tamil during hearings scheduled to read out the charges against him. What is there We have to fight, fight, fight, he told another well-wisher with a smile. He looked the least bit troubled by charges of

criminal breach of trust which may result in a life term for him if found guilty. Another political move of Raja is his refusal to seek bail when Kanimozhi, several Reliance directors and other accused sought it. Rajas move appears self-righteous, but it is not so. He could be waiting for the outcome of his former Telecom Secretary Sidhartha Behuras bail plea. Raja and Behura will sink or swim together. A year after spending time in jail, it seems likely that Raja will get bail if Behura gets it. So Behura is the test case for him and he could be waiting for his chance. The spotlight in the 2G scam, however, remains on Raja, but he has ensured that the media focuses on side issues and not his criminality. For instance, he moved an application in court refusing to cross-examine CBI witnesses on grounds that the CBI was still investigating the case. The CBI found it absurd, considering that Raja is accused No 1 in the scam. Rajas theatrical tricks stole some moments for him. For example, when he was spotted on more than one occasion to be dozing off during court proceedings, it evoked some sympathy among observers. The obvious question in peoples minds: He must be tired. Why is he in jail, when other co-accused are out on bail? Such comments are common in the courtroom during the trial. Clearly, Raja is playing to the limited gallery in court. Raja always tries to maintain an image of being cool and calm. Only once did his emotions betray him, when his former aide A Achary appeared as a CBI witness and gave damning evidence against Raja. Raja had had a 10-year association with Achary and the latter bared many facts about Raja. Raja never once left the side of his lawyer Sushil Kumar, watching and listening keenly to Achary and constantly advising his lawyer during the course of his crossexamination. One could read from Rajas face that he felt betrayed, as he did not look even once into the eyes of Achary. Achary did try to neutralise his diatribe against Raja by announcing in court that deep in my heart, Raja is like an elder

brother to me I used to have lunch and breakfast at his house occasionally and he was very protective of me, more so, when I was a bachelor. Even then Raja did not look at Achary even once. Achary, who was the CBIs star witness, broke down in front of Rajas lawyer Sushil Kumar after his cross-examination. Please ask him (Raja) to at least look at me once, he pleaded with Sushil Kumar, but Raja looked away. Reality, however, has cast its shadow on Rajas future for some time now. He himself is a lawyer and used to practice in local courts at Chennai. He sometimes argues his own case. He has

begun to realise that the evidence already on paper does not support his case of total innocence in spectrum allocations in 2008. All this is taking a toll. He is not chirpy anymore unlike his earlier days in Tihar. Jail authorities say that his initial three months were like a picnic for Raja. He used to hobnob with fellow prisoners and had lots of visitors. He continues to get home food. But as he completes a year, Raja realises that he may have to stay in the cooler for some more time.

Anniversary: Raja completes

one year in Tihar

FP Staff, Feb 1, 2012

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