Report on 2 g spectrum scam


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Report on 2 g spectrum scam

  1. 1. <br /> This is the biggest scam till now in India.The Supreme Court said that this 2G Scam is the mother of all the Scams.<br /> The 2G spectrum scam involved officials 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. The shortfall between the money collected and the money which the law mandated to be collected is 1,76,379 crore rupees or USD 39 billion. The issuing of licenses occurred in 2008, but the scam came to public notice when the Indian Income Tax Department was investigating political lobbyist Nira Radia.<br /> The government's investigation and the government's reactions to the findings in the investigation were the subject of debate, as were the nature of the Indian media's reactions. The discussion around the reactions to the 2G spectrum scam became known in the media as the Nira Radia tapes controversy. <br /> <br /> A Raja , the Ex-Minister of Communications andInformation Technology , is an Indian politician from the DMK, who sold the licences and played a key role in 2G Scam and also who knows full details regarding 2G Scam.<br /> Generally , Tele Communication companies have to take licence from Government by paying large amounts for their operations and also Government have many rules to give permission for new companies in Tele Communication.So,due to Raja , many companies got the licences very cheaply and also many new companies started their services with out eligibility criteria,which is illegal.<br /> Following is the information given by Comptroller and Auditor General(CAG):<br /><ul><li>On nov 11th,The Comptroller and Auditor General(CAG) announced that revenue loss for India due to Raja at Rs.1.8L Cr.</li></ul>CAG indicts Raja:<br /><ul><li>CAG says Raja caused Rs.177,000 crore loss to India.
  2. 2. Licences issued in 2008,pegged at 2001 prices.
  3. 3. Raja’s ministry sold spectrum to 9 companies in 2008 using faulty & outdated policy,causing Rs.140,000 crore loss.
  4. 4. Doled out additional airwaves to existing telecos beyond what they were entitled to,causing an additional loss of nearly Rs.37,000 crore to exchequer.
  5. 5. Raja gave dual licence permits to RCOM & Tata tele in 2008 using old policy , causing a loss of up to Rs.37,000 cr.
  6. 6. Raja ignored advice of Telecom Regulatory TRAI , Finance Ministry & Law Ministry on pricing airwaves at realistic & market-driven rates.
  7. 7. He ignored Prime Minister’s advice also to favouring some corporates,Raja flouted all norms.
  8. 8. Raja dished out pan-India airwaves for Rs.1651 Crore despite S tel offering Rs.13,752crore & even willing to inhance this offer if the government were to receive a higher bid.
  9. 9. Six of the nine companies that were given licences did not fulfill the eligibility criteria , but communications ministry (Raja)did not reject their applications.
  10. 10. The Six companies are:</li></ul> 1.Etisalat<br /> 2.Datacom(Videocon)<br /> 3.Unitech(which coded majority control to Norway Telenor)<br /> 4.Allianz Infratech<br /> 5.Loop Mobile <br /> 6.S Tel<br /> Criteria for working out potential loss <br /> Rates offered On the basis of<br />Category by S Tel 3G auction<br />New Licences Rs.657525cr Rs.102497cr<br />Dual Technology Rs.24591cr Rs.37153cr<br />Beyond contracted<br />Quantity of 6.2MHZ Rs.36729cr<br />Total Rs.90316cr Rs.176379cr<br />WEB Of Allegations:<br /><ul><li>CAG says telecom ministry had flouted every canon of financial propriety,rules and procedures.
  11. 11. Raja issued licences to ineligible applicants:85 of 122 licences issued in 2008 were illegal as these cos had disclosed incomplete information , submitted fictitious documents and used fraudulent means to get permits.
  12. 12. Allianz Infratech , Datacom(Videocon), Unitech(Telenor), S Tel, Loop Mobile and Etisalat were not eligible for mobile prmits.
  13. 13. Swan Telecom appeared to act as a ‘front company’ on behalf of Anil Ambhani-led Reliance Telecom.
  14. 14. Profit list for spectrum changed in Punjab & Maharashtra to favour Swan.
  15. 15. Telecom ministry gave undue benefits to RCOM & Swan.</li></ul> Spectrum of Controversies:<br />Spectrum Scam:<br /><ul><li>Amount paid by new Telecos for a pan-India licence in 2008: Rs.1,651 crore.
  16. 16. Estimated loss to exchequer on selling licences cheap:Rs.140,000 crore.</li></ul>Easy Money:<br /><ul><li>Swan Telecom taken the licence for Rs.1537 crore and sold 45% stake to UAE’s Etisalat for $900m(Rs.4200 cr).
  17. 17. Unitech taken licence for Rs.1661 crore and sold 60.00% to Norway’s Telenor for $1.1 billion(Rs.6200 cr).
  18. 18. S Tel sold 49% to Bahrain’s Batelco for about $225m.</li></ul>On nov 14th Raja quit as congress refuses to relent and Kapil Sibal taken the charge.<br />Actions Taken By The Government To Prevent The 2G Scam:<br /> <br /><ul><li>Enforcement Directorate(ED) has writeen to countries from where money was received by Indian firms for details on investors & source of funds.
  19. 19. It is also examing role of prominent corporate lobbyist who is alleged to have player a role in influencing the way the permits were awarded to new companies.
  20. 20. Opposition (BJP)to press for Joint Parliamentary Committee probe.
  21. 21. Janata Party President Subramaniam Swamy filed a complaint in Supreme Court on Raja.So, the issue is in SC.
  22. 22. The Telecom Regulatory has asked the Government to cancel 62 of the 122 licences issued by former Telecom Minister A Raja.
  23. 23. The CAG in its report said 85 of 122 licences given to six companies , notably Uninor,Videocon,Loop Mobile,S Tel,Etisalat and Allinz Infratech were illegal as these firms were not eligible to obtain them.
  24. 24. ED quizzes Niira Radia,who is a lobbyist & owner of Vaishnavi Corporate Communications that handles PR for of all Tata companies for role in 2G Scam for 7hours.
  25. 25. Supreme Court given the case to CBI for investigation.
  26. 26. CBI raids Raja across the Spectrum.
  27. 27. CBI searches Raja houses in Delhi,Chennai.
  28. 28. SC questions Rs.10,000 cr loans to new licences.
  29. 29. Court asked CBI to examine the feasibility of probing the allocation of radio spectrum since 2001,when BJP-Led NDA Government was in power.
  30. 30. Judges appealed to be critical of a decision by SBI to lend Rs.2500 cr to Uninor.
  31. 31. CBI told to court that they will complete the investigation in 3 months,later they told they need 6 months time.</li></ul>Some Of The Other Actions To Prevent 2G Scam: <br /><ul><li>The proceedings of the parliamentary committees should be made available to the media and public,so that people can understand the issue clearly.
  32. 32. The Government must take the serious and severe decisions especially in these type of scams,so that no one tries to cheat.
  33. 33. Government has to prove itself by arresting the illegal persons,whether they are anybody.
  34. 34. Both media and the general public must create an awareness that the government is a trustee of public money and assets and the people are the real owners.
  35. 35. Media has played an important role in curving a public opinion .So,alert citizen and conscientious media.
  36. 36. Creating fast track prosecution.
  37. 37. Finally….</li></ul> Main issues in 2G Spectrum Scam:<br /><ul><li>2G licences at throwaway prices
  38. 38. Rules bent,no procedures followed.
  39. 39. Cut-off date advanced
  40. 40. No auction,no bids.
  41. 41. First-come-first-served.
  42. 42. Swan Telecom licence:Rs.1537 crore
  43. 43. Sold 45% stake:Rs.4200 crore
  44. 44. Mobile subscriber base:
  45. 45. 2001:4 million
  46. 46. 2008:350 million
  47. 47. Unitech Wireless licence:Rs.1661 crore
  48. 48. Sold 60% stake:Rs.6200 crore
  49. 49. Revenue Loss:1.8L Crore
  50. 50. Licences issued in 2008,pegged at 2001 prices.
  51. 51. Law Ministry,Finance Ministry,TRAI and PM’s advice ignored.
  52. 52. Government Revenue:
  53. 53. 2G:Rs.10772 crore
  54. 54. 3G:RS.1 Lakh crore
  55. 55. Souces:
  56. 56. Economic Times
  57. 57.
  58. 58.
  59. 59.</li></ul> Report on 2G Spectrum Scam<br /> <br /> <br /> Submitted by:<br /> Dileep<br /> Madhur<br />