2g Scam

The 2G Spectrum Scam Story The 2G Spectrum Scam Story WHAT IS 2G? It is a term used in telecommunication sector. It is a spectrum which support 2G technology. High bandwidth is required for this purpose. 2G means second-generation wireless telephone technology. Second generation 2G cellular telecom networks were commercially launched on the GSM standard in Finland in 1991. 2G introduced data services for mobile, starting with SMS text messages. WHAT IS CAG? The CAG is a typical file-based government auditing agency. It stresses on reporting deviations from set procedures and policies . WHAT IS SPECTRUM SCAM? According to comptroller and auditor general(CAG) – 2G licenses issued to private telecom players at throwaway prices in 2008. 2G spectrum allocation had caused revenue loss of Rs 1.76 lakh crores and procedures flouted while issuing licenses. How did it start? On November, 2008, Subramanian Swamy wrote to Prime Minister Manmohan Singh and followed it up with four more letters seeking sanction to prosecute A. Raja in regards to 2G telecom spectrum political corruption scam.When the Prime Minister Manmohan Singh didn't take any decision Swamy went to Supreme Court. On 27 November 2010 Subramanian Swamy announced that he will file a criminal case against former union minister A. Raja in the 2G Spectrum Scam before the Special Court for Corruption Cases in connection with the charges of irregularities in 2G spectrum allocation. CHRONOLOGY May 16, 2007: A Raja appointed as Minister for Telecommunications for a second term. October 25, 2007: The Centre rules out the possibility of auctioning 2G (second generation) spectrum for mobile services. September-October 2008: 2G spectrum licences given to telecom firms. November 15, 2008: The Central Vigilance Commission in its initial investigation report finds lapses and recommends action against certain Telecom Ministry officials. October 21, 2009: CBI registers a case to probe 2G Spectrum case.   December 13, 2010 : DoT notifies the terms of reference of retired Supreme Court Justice Shivraj V Patil committee to look into the spectrum allocation procedures and policies. It is asked to submit its report to the Telecom Minister. December 24 and 25, 2010: Raja questioned by CBI January 31, 2011: Raja interrogated by CBI for third time: The one-man Patil Committee submits its report February 2, 2011 : Raja, former Telecom Secretary Siddartha Behura and Raja's former personal secretary R K Chandolia arrested by the CBI in connection with 2G spectrum case POINTS MADE BY CAG REPORT 85 firms suppressed facts, gave fictitious papers to DoT DoT kept spectrum pricing issue out of GSM's purview A Raja ignored Prime Minister's, FM's and Law Ministry's advice. Spectrum was rare national asset, should have been auctioned. 2G spectrum allocated to new players at throwaway prices. POINTS MADE BY CAG REPORT Undue advantage to Swan Telecom in allocation of spectrum. Email ID of Swan Telecom shown as that of a Reliance ADA group official. Idea and Spice not given spectrum on grounds of proposed merger- this was against the rules. Allocation of 2G spectrum led to loss of Rs. 1.76 lakh crore. DoT did not follow its own practise of first-come-first-serve in letter and spirit. POINTS MADE BY CAG REPORT Cut-off date for license letters advanced arbitrarily by a week This went against time-tested procedures of government functioning Entire process lacked transparency Undertaken in arbitrary and inequitable manner Spectrum allocated beyond contracted quantity to 9 firms including Bharti, Vodafone, Idea, BSNL, Reliance, Aircel. RADIA TAPES CONTROVERSY The Radia tapes controversy relates to the taped and released telephonic conversations between Nira Radia, a professional lobbyist, and politicians, corporates and industrialists, officials, bureaucrats, and journalists that were taped by the Indian Income Tax Department in 2008–09. The tapes led to government and public accusation that these calls evidence the planning of the 2G spectrum scam, along with other criminal activity. Nira Radia runs a public relations firm named Vaishnavi Corporate Communications, and also operates through subsidiaries such as Neucom, Noesis Strategic Consulting Services and Vitcom Consulting, whose clients, among others, include Ratan Tata's Tata Group, Mukesh Ambani’s Reliance Industries and Prannoy Roy's NDTV CONTINUE… WHO ALL BENEFITED FROM THIS SCAM? 2G spectrum was allocated beyond contracted quantity to 9 firms including Bharti, Vodafone, Idea, BSNL, Reliance, Aircel. Department of Telecommunications (DoT) circumvented the rules to help Swan Telecom, which effectively acted as a front for Reliance Telecommunications. The charges in the CAG report are that Swan should not have been considered for a license because Reliance Communications held 10.7% 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. 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. 1,661crore, it sold 60 per cent stake to Telenor Asia for a whopping Rs. 6,200crore. CONTINUE… POLITICIANS INVOLVED A. Raja, the Ex-Minister of Communications and Information Technology who was the minister when the controversial second round of spectrum allocations took place. Arun Shourie, the minister for Telecom during 2003 in the previous BJP regime. Pramod Mahajan, the minister for Telecom between 1999 and 2003. BUREAUCRATS INVOLVED Siddhartha Behura, former telecom secretary who served in the DOT at the time of the 2G allocation. Pradip Baijal, a bureaucrat who is alleged to have implemented policies that favored certain Telecom companies when he was heading the TRAI. R K Chandolia, private secretary of Raja during UPA-I when the licences were awarded. He was an Indian Economic Service officer of the 1984 batch cadre. CORPORATIONS INVOLVED Unitech Group a real estate company entering the telecom industry with its 2G bid; sold 60% of its company stake at huge profit to Telenor after buying licensing (Including land values properties for towers) Swan Telecom sold 45% of its company stake at huge profit to Emirates Telecommunications Corporation (Etisalat) after buying licensing Loop Mobile Videocon Telecommunications Limited S Tel CORPORATIONS INVOLVED Reliance Communications Sistema Shyam Mobile (MTS) – Sistema Mobile Russia Tata Communications Vodafone Essar Dishnet Wireless Allianz Infra MEDIA PERSONS & LOBBYIST INVOLVED Nira Radia, a former airline entrepreneur turned corporate lobbyist whose conversations were leaked creating the Nira Radia tapes controversy. Barkha Dutt, an NDTV journalist alleged to have lobbied for A. Raja's appointment as minister. Vir Sanghvi, a Hindustan Times editor alleged to have edited articles to reduce blame in the Nira Radia tapes. PETITIONERS 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. Prashant Bhushan, on behalf of the Centre for Public Interest Litigation. Anil Kumar, on behalf of the civil society organisation Telecom 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. PETITIONERS WHAT HAPPENED AFTER THE SCAM? 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. 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. RESPONSE TO THE SCAM In early November 2010 Jayalalithaa accused the Tamil Nadu state chief minister M Karunanidhi of protecting A. Raja from corruption charges and called for A. Raja's resignation. By mid November A. Raja resigned. In mid November the comptroller Vinod Rai issued show-cause notices to Unitech, S Tel, Loop Mobile, Datacom (Videocon), and Etisalat to respond to his assertion that all of the 85 licenses granted to these companies did not have the up-front capital required at the time of the application and were in other ways illegal. 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. 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. 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. Raja, Behura and Chandolia were arrested on Feb 2nd 2011. RESPONSE TO THE SCAM Submitted by: Kanupriya Urvashi Rashmi Bhagesh