• LAWGIC STRATUM

2G Spectrum scam: Case study

Author: Palvi Ravinder Kumar



Introduction:


2G spectrum scam is an on-going one of the biggest alleged scam case after the Indian Coal scam.It is a combination of three cases, one filed by Enforcement Directorate (ED) and two cases registered by the CBI. Former Telecom Minister A. Raja, along with 14 otherswas accused in this case including politicians, Bureaucrats, Telecom companies, and private officials of the United Progressive Alliance (UPA). On 16th Nov. 2010 Controller and Auditor General (CAG) of India reported that 2G licences for mobile networks were sold at throwaway prices instead of carrying free and fair auctions by the telecom ministry which caused an estimated loss of Rs 1.76 lakh crore to the Indian national exchequer[1]. In 2009, CBI files a charge sheet, running into 127 pages and having 88,000 annexure against A. Raja and 14 others accused in the special court set up for the 2G case. On Dec. 21st 2017, Special CBI judge OP Saini acquitted all the accused, including A. Raja and Kanimozhi citing lack of evidence[2].


The Complete Case Scenario[3]:


2007: In the month of May, A. Raja takes over as Telecom Minister. On Sept. 25thTelecom ministry decides to sell its spectrum to different companies and it issues a press note fixing deadlines for application as Oct.1, 2007. DoT receives 575 applications for UAS licences of 46 firms by Oct. 1st. On Nov. 22nd the Finance Ministry writes to DoT raising concerns over the procedure adopted because DoT decided to fix a selling rate of the spectrum instead of choosing the traditional method of first-come-first-serve basis (FCFS) and auction.


2008: The Telecom Ministry allocates 122 licences of 2G Spectrum on first-come first-service (FCFS) basis with the fixed price option and made such conditions which favour some telecom companies which include Swan Telecom, Reliance telecommunications, Unitech. Right after that these companies sell off a part of their stakes at much higher rates to Etisalat, Telenor and DoCoMo respectively, which became a matter of concern for media and others.


2009: Central vigilance commission (CVC) directs CBI to investigate the matter. In Oct. CBI files FIR against officers of DoT, Private persons/Companies and others. On Nov. 10th CAG submits report on 2G Spectrum to Government stating loss of Rs 1.76 Lakh Crore to exchequer. In Nov. 2010, A.Raja resigns as Telecom Minister because of the accusations on him, where Kapil Sibal takes his place as the telecom minister and brings the “zero loss theory” in 2011.


2011: On Feb.10th SC asks CBI to bring all the corporate companies which were beneficiaries of the 2G Spectrum. On Feb.17-18 A. Raja and Balwa were sent to Tihar Jail under Judicial Custody. On Mar.14th the Delhi HC sets up special court to deal exclusively with 2G. In Feb. 2012,The SCin response to a Public Interest Litigation (PIL) cancels all 122 spectrum licenses allocated in 2008 as it was convinced of procedural irregularities.


The Allegations[4]:


It is said that the big faces of the scam were the Ex-Telecom Minister A. Raja along with K. Kanimozhi (Youngest daughter of the five times CM of Tamilnadu M.Karunanidhi), Siddhartha Behura (Ex-Telecom Secretory), RK Chandolia (Raja’s PS) and other officials of Telecom Companies.


Raja is alleged to have changed/bentauction rules and eligibility criteria for allocation of the 2G Spectrum. The ministry decided to issue licenses on first-come-first-serve basis (FCFS) policy that too at 2001 prices, not at 2008 prices, and advanced the cut-off date to Sept. 25th.


Officials at the Ministry allegedly shut counters to physically block selected telecom companies from entering the fray. The CBI and ED during their investigation found that A. Raja had received over Rs 3000 crore as bribe in the allotment of 2G licenses. Further he allowed the companies to sell equity/ conduct private auctions by ignoring specific recommendations of the TRAI[5].


Telecom Minister A. Raja acted against the advice of TRAI, Law Ministry and Finance Ministry. CBI in its Charge-sheet accused Raja of getting Swan’s Shahid Balwa to invest in Rs 200 crore into Kalaignar TV Pvt Ltd. (A company controlled by some members of the DMK’s Family).


CBI also accused Kanimozhi for being in regular touch with A. Raja regarding the launch of Kalaignar TV channels.


The Other Accused:


Along with politicians and bureaucrats, a number of executives were also accused in the CBI charge-sheetwhich are:

  • Unitech chief Sanjay Chandra.

  • DB Realty founder Vinod Goenka.

  • Swan promoter Shahid Usman Balwa.

  • Three senior executives of Anil Ambani controlled ADAG- Gautam Doshi, Hari Nair and Surendra Pipara.

  • Essar group promoters Ravikant Ruia and Anshuman Ruia.

  • Loop telecom promotors I.P. Khiatan and Kiran Khitan.

  • Asif Balwa, Rajiv agarwal, Sharad Kumar and Karim Morani[6].

Corporations- Swan Telecom, Reliance Telecom, Unitech Wireless.


The Verdict:


Seven years later, in Dec. 2017 The Delhi HC acquitted each of the 18 accused including A. Raja and K. Kanimozhi in 2G range assignment case stating that “the prosecution had failed miserably in proving the charges against the accused”. The special judge OP Saini held that there was no criminality or conspiracy in spectrum allotment and said some people created “a scam by artfully arranging a few selected facts and exaggerating things beyond recognition to astronomical levels”.


According to the special court, CBI couldn’t prove that A.Raja, along with telecom ministry officials manipulated the cut-off date for bids or the FCFS policy for allocation of spectrum. CBI couldn’t link A. Raja to the money transfer of Rs 200 crore to Kalaingar TV by Dynamix Balwa group. Documentary evidence and witness testimony couldn’t prove that the accused ignored ineligibility of Swan telecom and Unitech group of companies[7].


In March 2018, the SC directed the ED and CBI to complete probes and close all cases related to the 2G scam within 6 months. In Jan. 2021 CBI commenced fresh arguments in Delhi HC in its appeal against the acquittal of A. Raja and others in 2G Spectrum scam case[8].


References:

[1]“What was the 2G Spectrum scam? 10 things to know” India Today (Dec. 21, 2017 , 16:03 IST)- https://www.indiatoday.in/fyi/story/what-is-2g-scam-in-india-2g-scam-verdict-upa-a-raja-cbi-judge-op-saini-verdict-things-to-know-1113444-2017-12-21 [2]“Some people created a scam by artfully arranging a few selected facts: 2G case judge” The Indian Express (Dec. 21, 2017, 7:07:17 pm) https://indianexpress.com/article/india/2g-scam-case-verdict-judge-op-saini-this-is-why-a-raja-and-kanimozhi-have-been-acquitted-4992445/ [3]“2G scam: A chronology of events” The Hindu Business Line (Mar. 12, 2018) https://www.thehindubusinessline.com/info-tech/2g-scam-a-chronology-of-events/article20352110.ece1 [4]Subhajti Sengupta and Suhas Munshi “2G scam explained” News 18 https://www.news18.com/news/immersive/2g-scam-explained.html [5]Shalini singh “2G scam judgement: What was the scam? Detailed account of modus operandi of India’s biggest corruption scandal” First Post (Dec. 21, 2017, 13:20:29 IST) http://www.firstpost.com/india/2g-verdict-today-2g-andimuthu-raja-kanimozhi-central-bureau-of-investigation-dravida-munnetra-kazhagam-m-karunanidhi-what-is-the-scam-a-detailed-account-of-the-modus-operandi-of-indias-biggest-corrupt-4268881.html [6]“Special court concludes arguments in 2G scam case” The Hindu (Apr. 19, 2017, 18:33 IST) https://www.thehindu.com/news/national/special-court-concludes-arguments-in-2g-scam-case/article18142516.ece [7]Aamir Khan and Abhinav Garg “2G spectrum verdict: No proof of scam, A scam of lies, says Congress” The Times Of India (Dec. 22, 2017, 10:18 IST) http://toi.in/cJqmbb/a31ga8 [8]“CBI commences fresh arguments in Delhi HC in appeal against acquittals in 2G scam case” The Print (Jan. 14, 2021, 6:47 IST) https://theprint.in/india/cbi-commences-fresh-arguments-in-delhi-hc-in-appeal-against-acquittals-in-2g-scam-case/585555/

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