2G spectrum scam


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A brief overview on one of the biggest scam of india.

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2G spectrum scam

  2. 2. What is 2G Spectrum ?
  3. 3. 2G 2G (or 2-G) is short for second- generation wireless telephone technology.  Phone conversations can be digitally encrypted.  Systems are significantly more efficient on the spectrum allowing for far greater mobile phone penetration levels.  2G introduced data services for mobile, starting with SMS text messages.
  4. 4. Spectrum spectrum refers to the part of the electromagnetic spectrum corresponding to radio frequencies. Electromagnetic waves in this frequency range, called radio waves, are used for radio communication and various other applications. So, private players use this spectrum and charge subscription from mobile users and this way they makes money.
  5. 5. Allocation of Spectrum 85% 15% Defence Department Telecom Department www.dot.gov.in
  6. 6. INTRODUCTION 2G spectrum scam was a scam involving politicians and government officials in India illegally undercharging mobile telephony companies for frequency allocation licenses, which they would then use to create 2G spectrum subscriptions for cell phones.
  7. 7. BACKGROUND India is divided into 22 telecom zones, with 281 zonal licenses in the market. In 2008, 122 new second generation (2G)Unified Access Service (UAS) licenses were given to telecom companies at the 2001 price and on a first- come-first-serve basis.
  8. 8. The shortfall between the money collected and the money that the law mandated to be collected is estimated to be INR1766.45 billion (US$29 billion).
  9. 9. 3STOOGES REPORT on 2 April 2011 by the investigating agency, Central Bureau of Investigation (CBI), the loss was pegged at INR309845.5 million (US$5.1 billion). on 19 August 2011 in a reply to CBI, Telecom Regulatory Authority of India (TRAI) said that the government gained over INR30 billion (US$490 million)
  10. 10. Kapil Sibal, the Minister of Communications & IT, claimed in 2011, during a press conference, that "zero loss" was caused by distributing 2G licenses on first-come-first-served basis.
  11. 11. CAG REPORT  Licenses were issued to firms with no prior experience in the telecom sector  Spectrum scam has cost the government Rs. 1.76 lakh crore  Rules and procedures flouted while issuing licenses Vinod Rai
  12. 12. The Supreme Court declared allotment of spectrum as "unconstitutional and arbitrary" and quashed all the 122 licenses issued in 2008 during tenure of A. Raja
  13. 13. Parties Involved in the Scam
  14. 14. Politicians ARaja. Former Union Cabinet Minister (Communication and Information Technology – 2007 & 2009). Criminal breach of trust by a public servant under section 409, criminal conspiracy under section 120-B, cheating under section 420 & forgery under sections 468 and 471. Booked under the Prevention of Corruption Act for accepting illegal gratification.
  15. 15. What are the charges on former telecom minister a raja?  Entry fee for spectrum licenses in 2008 pegged at 2001 prices.  Rules changed after the game had begun.  Cut-off date for applications advanced by a week.  Licenses issued on a first-come-first-served basis.  No proper auction process followed, no bids invited.  Raja ignored advice of TRAI, Law Ministry, Finance Ministry.  TRAI had recommended auctioning of spectrum at market rates. NDTV.com
  16. 16. Status – Taken into custody (arrested) by CBI on 2 February 2011, On 9 May 2012 he applied for bail for the first time since his arrest and was granted bail on 15 May 2012. As of August 2012, trial is being conducted in Special CBI Court.
  17. 17. M. K. Kanimozhi Daughter of five-time Chief Minister of Tamil Nadu, M. Karunanidhi. Political party DMK. She is a member of parliament, representing Tamil Nadu in the Rajya Sabha (the upper house of Indian Parliament).
  18. 18. Status – Taken into custody (arrested) by CBI on 20 May 2011.Granted bail on 28 November 2011 after spending 188 days in judicial custody. As of August 2012, trial is being conducted in Special CBI Court.
  19. 19. Bureaucrats  Siddharth Behura Telecom Secretary when licenses were granted.  RK Chandolia Raja's private secretary when licenses were granted
  20. 20. Corporate Executives  Sanjay Chandra Former MD, Unitech Wireless  Gautam Doshi Group MD, Reliance Anil Dhirubhai Ambani Group  Hari Nair Senior vice-president, Reliance Anil Dhirubhai Ambani Group  Surendra Pipara Senior vice- President, Reliance Anil Dhirubhai Ambani Group.  Vinod Goenka Promoter and managing director, DB Realty & Swan Telecom  Shahid Balwa Promoter, DB Realty & Swan Telecom
  21. 21. Corporations  Unitech Wireless  Reliance Telecom  Swan Telecom  Loop Telecom Pvt Ltd  Loop Mobile India Ltd  Essar Tele Holding  Essar (Parent group of Essar Tele Holding)
  22. 22.  Unitech, Swan Telecom got licenses without any prior telecom experience  Swan Telecom given license even though it did not meet eligibility criteria  Swan got license for Rs. 1537 crore, sold 45% stake to Etisalat for Rs. 4200 crore  Unitech Wireless got license for Rs. 1661 crore, sold 60% stake for Rs. 6200 crore NDTV.com
  23. 23. The role of kalaignar tv  One of the companies named by the CBI in the 2G scam - Swan Telecom - allegedly sent Mr Raja a Rs. 214-crore kickback that was routed through a maze of companies but rested finally with Kalaignar TV channel in Chennai that is owned mainly by Kanimozhi and Dayalu Ammal. Together, they have 80% stake in the company.  Sharad Kumar, the Managing Director of Kalaignar TV, owns the balance and has also been accused of conspiring with Mr Raja.
  24. 24. Shahid Balwa transferred 214-crore to Kusegaon Fruits and Vegetables of which Shahid Balwa's younger brother Asif Balwa was a director. Kusegaon Fruits & Vegetables then transferred to Cineyug Films whose promoter Karim Morani transferred it to Kalaignar TV.
  25. 25. Radia tapes controversy The Radia tapes controversy relates to the telephonic conversations between Nira Radia, an influence peddler and an acquaintance of the (then) Indian telecom minister A. Raja, and with senior journalists, politicians, and corporate houses, taped by the Indian Income Tax Department in 2008–09.
  26. 26.  Bharkha Dutt (Group Editor of NDTV)  Vir Sanghvi (Editorial Director of Hindustan Times)
  27. 27. Current Status CBI court sends 1700 questions for Raja, others in 2G scam Smriti Singh & Sana Shakil, TNN | Mar 28, 2014, 06.02AM IST Times of India
  28. 28. Special CBI Judge O P Saini supplied draft questionnaire, containing 1,718 questions to the advocates representing the 17 accused.
  29. 29. Thank You