2G spectrum scam

The 2G spectrum scam in involved the issue of 1232 licenses by the ruling Congress- led UPA alliance of the 2G spectrum to 85 companies including many new telecom companies with little or no experience in the telecom sector at a price set in the year 2001.

What Is Spectrum Scam?

2G licenses issued to private telecom players at throwaway prices in 2008

CAG: Spectrum scam has cost the government Rs. 1.76 lakh crore

CAG: Rules and procedures flouted while issuing licenses

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. 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).

Civil Servants, Politicians and Corporations Involved in scam

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.

Politicians, Ministers and Parliamentarians involved

 Andimuthu Raja, Union Cabinet Minister for Communications and Information Technology : 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. 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.  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 . 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. She has been charged with section 7 and 11 of the Prevention of Corruption Act. The sections deal with acceptance of alleged gratification.

Bureaucrats involved

 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. 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. However, Baijal is expected to get a clean chit in this issue.  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 DDG-access services A K Srivastava's room, had handed out letters of intent to representatives of various companies.

Corporations involved

 Allianz Infra   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  airtel

Corporate personalities involved

 Anil Ambani - Reliance Group (ADAG)[15] -   Shahid Balwa - Swan Telecom (now Etisalat DB)  Vinod Goenka - Swan Telecom (now Etisalat DB)  Venugopal Dhoot - Videocon Group  Prashant Ruia - Essar Group  Sanjay Chandra, Managing Director of Unitech Ltd and Unitech Wireless

All of them have either been questioned by the CBI or are prospective suspects in the scam.

Media persons and lobbyists involved

 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.

Politicians, Ministers and Parlimentarians involved:

 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.  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.

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.  , 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.  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.

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.

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.

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.

On February 8, 2011, the CBI arrested 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.

On March 29, 2011, in , 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.

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:

1. Andimuthu Raja, former Telecom minister 2. Siddharth Behura, former Telecom Secretary 3. R.K. Chandolia, Raja's former personal secretary 4. Shahid Usman Balwa, former Director of Swan Telecom (now Etisalat DB) 5. Sanjay Chandra, Managing Director of Unitech Ltd and Unitech Wireless 6. Gautam Doshi, Group MD, Reliance Anil Dhirubhai Ambani Group 7. Hari Nair, Senior Vice-President, Reliance Anil Dhirubhai Ambani Group 8. 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 TRAI’s 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 Unitech’s 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)

In conclusion, it is observed that despite having themselves sought the opinion of the Ministry of Law and Justice, the Department of Telecommunications decided to ignore the advice received. The concerns of the Ministry of Finance were also not addressed for reasons which are not convincing. In fact, the directions of the Hon’ble Prime Minister evoked a response from the Hon’ble Minister of Communications and Information Technology on the same day. The letter contained assurances with regard to the availability of spectrum for all applicants as also with regard to the strict adherence to the FCFS policy for allocation of spectrum. The assurances, however, were not adhered to. The methodology for allocation of 2G spectrum, a scarce finite national asset and for which there was an unprecedented demand for allocation, was not deliberated upon by the full Telecom Commission. Audit is of the view that such discussion with different stake holders represented in the Telecom Commission would certainly have benefitted Department of Telecommunications in arriving at a more credible and transparent procedure for allocation as also for ascertaining the true value of 2G spectrum. The entire implementation process does not withstand the test of scrutiny, and hence, the widely held belief that it has benefitted a few operators and has not been able to maximise generation of revenue from allocation of such a scarce resource. This has now been confirmed in Audit. The role of Telecom Regulatory Authority of India would also appear to have been reduced to that of a hapless spectator as its recommendations were either ignored or applied selectively. The entire process of allocation of 2G spectrum raises serious concern about the systems of governance in the Department of Telecommunications which need to be thoroughly.