2 g spectrum scam


Published on

1 Comment
  • thanks for liking my content
    do give suggestn abt other uploads 2

    plz keep followg me coz more content to come up soon

    plz follow me on twitter 2
    u will find d link in my profile pg
    Are you sure you want to  Yes  No
    Your message goes here
No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

2 g spectrum scam

  2. 2.  The 2G spectrum scam involved officials and ministers in the Government of India illegally undercharging mobile telephony companies for frequency allocation licenses, which they would use to create 2G subscriptions for cell phones. According to a report submitted by the Comptroller and Auditor General based on money collected from 3G licenses, the loss to the exchequer was 176,379 crore (US$38.27 billion). The issuing of the 2G licenses occurred in 2008, but the scam came to public notice when the Indian Income Tax Department investigated political lobbyist Niira Radia and the Supreme Court of India took Subramaniam Swamy's complaints on record [With Case type: Writ Petition (Civil),Case No:10, Year:2011].[1] The case details of the main PIL filed with the supreme court is Typewritten Petition (Civil),Case No:423, Year:2010.  In 2008, the Income Tax department, after orders from the ministry of Home and the PMO, began tapping the phones of Niira Radia. This was done to help with an ongoing investigation into a case where it was alleged that Niira Radia had acted as a spy.[3]  Some of the many conversations recorded over 300 days were leaked to the media. The intense controversy around the leaked tapes, became known in the media as the Radia tapes controversy. The tapes featured some explosive conversations between Politicians, Journalists and Corporate Houses. Politicians from Karunanidhi to Arun Jaitley, journalists like Barkha Dutt and Vir Sanghvi and Industrial groups like the Tata's were either participants or mentioned in these explosive tapes.
  3. 3. Politicians involved  Manmohan Singh, - Prime Minister of India from heading the ruling UPA government led by the Congress, who is accused of not acting on removing Raja, the main accused in the scam in spite of Finance minister Chidambaram's warning to him .In a note to the PM on January 15, 2008, Chidambaram had reiterated the finance ministry's suggestion to auction spectrum as the price would be based on scarcity value. He then went on to suggest this could be used as one-time for additional spectrum.  A. Raja - the Ex-Minister of Communications and Information Technology who was the minister when the controversial second round of spectrum allocations took place. Mr. Raja, an MP of the Dravida Munnetra Kazhagam from the Nilgiris constituency, was forced to resign following the public outcry.  Arun Shourie - the minister for Telecom during 2003 in the previous BJP regime. It was Arun Shourie who introduced the controversial technology neutral "Unified Access(both Basic & Cellular) Services License", which allowed fixed line operators who had paid much lower license fees to offer mobile phone services, at first in the limited WLL mode (Wireless local loop) and later, following an out of court settlement between mobile operators and the BJP govt, full mobility. This gave an advantage to players like Reliance and Tata Teleservices who managed to get mobile spectrum without paying the hefty fees that earlier operators like BPL Mobile had paid.
  4. 4. 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. 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. The houses and offices of the bureaucrat were recently when raided by the Central Bureau of Investigation as part of their investigations.  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. 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
  5. 5. Corporations Corporative involved personalities involved Unitech  Swan  Loop Mobile  Videocon Telecommunications  S Tel  Reliance Communications  Sistema Shyam Mobile  Tata Communications  Vodafone Essar  Dishnet Wireless  Allianz Infra  Anil Ambani - Reliance Group (ADAG)  Shahid Balwa - DB Realty and DB Etisalat (formerly Swan Telecom)  Prashant Ruia - Essar Group
  6. 6. Response to 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. Mr Sibal contends that the "notional" losses quoted are a result of erroneous calculations and insists that the actual losses are nil.  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.
  7. 7. Impact on stock markets  The first casualty in Stock Markets once Raja was arrested was DB Realty. DB Realty had given 200+ crores to Kalaignar TV( owned by Karunanidhi's Wife) . The news led to 20% fall in the stock prices of DB Realty. Sun TV had its shares fall by 10% on the next day following rumours of Kalanidhi Maran having stake in Kalaignar TV. Sun TV COO refused the allegations. Swan Telecom Chief Balwa was arrested on Feb 8 and this led to rumours of links with Anil Ambani's Reliance ADAG and it led to 20% fall of his stocks . Its reported that nearly 2 Billion USD was eroded from his stocks . Spicejet stocks went down after reports of investigation on Maran's recent takeover of Spicejet