2G Spectrum Scam

WHAT IS SPECTRUM SCAM?

From the time allegations of misappropriation during the bidding for allocation of 2G spectrum surfaced, till Telecom Minister A Raja's ouster, high drama charged both politics in Delhi and Tamil Nadu. So what exactly is the Spectrum Scam that led to all this?
 

• 2G licenses issued to private telecom players at throwaway prices in 2008
• CAG: Spectrum scam has cost the government Rs. 1.76 lakh crore
• CAG: Rules and procedures flouted while issuing licenses

WHAT ARE THE CHARGES ON FORMER TELECOM MINISTER A RAJA?

CHEAP TELECOM LICENSES
 

•  Entry fee for spectrum licenses in 2008 pegged at 2001 prices
•  Mobile subscriber base had shot up to 350 million in 2008 from 4 million in 2001

 NO PROCEDURES FOLLOWED

• 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

FAVOURITISM, CORPORATES ENCASH PREMIUM
 

• 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
• All nine companies paid DoT only Rs. 10,772 crore for 2G licences

OTHERS IN THE NET

• DMK chief M Karunanidhi's daughter and MP Kanimozhi who has been named by the CBI as a co- conspirator with A Raja
• Shahid Balwa, the promoter of Swan Telecom, who the CBI believes had a central role in the 2G spectrum scam. He has been accused of colluding with former Telecom Minister A Raja by allegedly channelising kickbacks Raja got from the spectrum sale into the real estate
• Unitech chief Sanjay Chandra and DB Realty founder Vinod Goenka who have been chargesheeted for cheating and conspiracy
• Three senior executives of Anil Ambani controlled ADAG, Gautam Doshi, Hari Nair and Surendra Pipara. All these are currently lodged in Tihar Jail
• Former telecom secretary Sidharth Behura, who allegedly shut counters to physically block other telecom companies, faces the same charges as Raja. And so does Raja's Personal Secretary RK Chandolia

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.