2G Spectrum Scam

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

CHARGES ON FORMER TELECOM MINISTER A RAJA

1)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

2) 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

3)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 forRs. 6200 crore All nine companies paid DoT only Rs. 10,772 crore for 2G licences

Others.
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

Swan Telecom - allegedly sent Mr Raja a Rs. 214-crore kickback Routed through a maze of companies but rested finally with Kalaignar TV channel in Chennai, 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

Companies to whom licenses were alloted:

Loop telecom pvt ltd Datacom solutions pvt ltd Shyam telelink ltd Shyani telelink ltd Swan telecom pvt ltd Allianz infratech pvt tld

Continued.
Idea cellular Spice communications ltd S Tel Tata teleservices Unitech group (now uninor)

**The licenses were later quashed by Supreme Court

Chronology of events and investigation 2007

May 2007: A Raja takes over as Telecom Minister

August 2007: Process of allotment of 2G spectrum for telecom along with Universal Access Service (UAS) Licences initiated by the Department of Telecommunications (DoT).
25 September 2007: Telecom Ministry issues press note fixing deadline for application as 1 October 2007. 1 October 2007: DoT receives 575 applications for UAS licences of 46 companies 2 November 2007: The Prime Minister writes to Raja directing him to ensure allotment of 2G spectrum in a fair and transparent manner and to ensure that licence fee was properly revised. Raja writes back to the Prime Minister rejecting many of his recommendations 22 November 2007: Finance Ministry writes to DoT raising concerns over the procedure adopted by it. Demand for review rejected

2008
10 January 2008: DoT decides to issue licences on firstcome-first-serve basis, preponing the cut-off date to 25 September, from 1 October 2007. Later on the same day, DoT posted an announcement on its website saying those who apply between 3.30 pm and 4.30 pm would be issued licences in accordance with the said policy.
2008: Swan Telecom, Unitech and Tata Teleservices sell off a part of their stakes at much higher rates to Etisalat, Telenor and DoCoMo, respectively

2009
4 May 2009: An NGO Telecom Watchdog files complaint to the Central Vigilance Commission (CVC) on the illegalities in the spectrum allocation to Loop Telecom.

19 May 2009: Another complaint was filed to the CVC by Arun Agarwal, highlighting grant of spectrum to Swan Telecom at throwaway prices.
2009: CVC directs CBI to investigate the irregularities in allocation of 2G spectrum. 1 July 2009: Delhi HC holds advancing of cut-off date as illegal on a petition of telecom company S-Tel. 21 October 2009: CBI registers a case and files an FIR against unknown officers of DoT and unknown private persons/companies under various provisions of IPC and Prevention of Corruption Act. 22 October 2009: Income Tax Department raids DoT offices. 16 November 2009: CBI seeks details of tapped conversation of corporate lobbyist Niira Radia to find out involvement of middlemen in the grant of spectrum to telecom companies. It has sought help from the Directorate General of Income Tax Investigationregarding information on Ms. Nira Radia of M/s Noesis Consultancy and records pertaining to middlemen regarding award of 2G spectrum licences

2010
13 March 2010: SC upholds Delhi HC verdict on cut off date advancement as illegal. 31 March 2010: CAG says that there was large scale irregularities in the spectrum allocation. 2 April 2010: CBI DIG (Investigations) Vineet Agarwal IRS and Director General of Income Tax (Investigations) Milap Jain IRS, who were investigating the case, transferred. Milap Jain was transferred as Director General of International Taxation. 6 May 2010: Telephonic conversation between Raja and Niira Radia taped by the Income Tax Department made public by the media.

May, 2010: NGO Centre for Public Interest Litigation moves the Delhi High Court seeking investigation into the scam by SIT.
25 May 2010: Delhi HC dismisses the petition.

cont
August 2010: Appeal filed in the Supreme Court against the High Courts order. 18 August 2010: HC refuses to direct the Prime Minister to decide on a complaint by Janata Party chief Swamy seeking sanction to prosecute Raja for his involvement in 2G scam.

13 September 2010: SC asks government, Raja to reply within 10 days to three petitions filed by CPIL and others alleging there was a 70,000 crore (US$12.67 billion) scam in the grant of telecom licences in 2008. 24 September 2010: Swamy moves SC seeking direction to the PM to sanction prosecution of Raja.
27 September 2010: Income Tax Department informs SC of probe against firms suspected to have violated FEMA. Says cant deny or confirm now Rajas involvement in the scam.

cont

8 October 2010: SC asks government to respond to CAG report about the scam.

21 October 2010: Draft reports of CAG placed before the Supreme Court.
29 October 2010: SC pulls up CBI for its tardy progress in the investigations into the scam. 10 November 2010: CAG submits report on 2G spectrum to government stating loss of 176,000 crore (US$31.86 billion) to exchequer. 11 November 2010: DoT files affidavit in SC saying CAG did not have the authority to question the policy decision as per which licence were issued to new players in 2008. 14 November 2010: A Raja resigns as Telecom Minister 15 November 2010: Kapil Sibal given additional charge of Telecom Ministry. 20 November 2010: Affidavit on behalf of PM filed in Supreme Court. Rejects charge of inaction on Swamys complaint.

cont..
22 November 2010: CBI and Income Tax tells SC it will file charge sheet in the case within three months. 22 November 2010: CBI tells SC role of corporate lobbyist Niira Radia would be questioned by it. 24 November 2010: SC reserves verdict on Swamys plea seeking direction to PM for grant of sanction to prosecute Raja. 25 November 2010: SC ticks off CBI for not questioning Raja. 29 November 2010: CBI files status report on 2G spectrum scam probe. 30 November 2010: SC questions CVC P J Thomass moral right to supervise CBIs probe into 2G spectrum scam as he himself was Telecom Secretary at that point of time. 1 December 2010: SC directs original tapes containing conversation between corporate lobbyist Niira Radia and others be handed over to it. 1 December 2010: Raja questions CAG findings in the SC.

cont
2 December 2010: Government places recorded tapes in the SC from the Directorate General of Income Tax Investigation. 2 December 2010: SC comes down heavily on Raja for bypassing and overruling PMs advice to defer allocation of 2G spectrum by a few days.

8 December 2010: SC favours including in the probe period since 2001 when first-comefirst-serve was the norm for spectrum allocation.
8 December 2010: SC asks Centre to consider setting up of a special court to try 2G spectrum scam case.

8 December 2010: Income Tax Department submits report. Says money trail covers 10 countries, including Mauritius.
14 December 2010: Another PIL in SC seeking cancellation of new telecom licences and 2G spectrum allocated during Rajas tenure. 15 December 2010: Swamy files petition in a Delhi court seeking his inclusion as a public prosecutor in 2G spectrum case. 15 December 2010: Swamy mentions in complaint that Raja favoured ineligible private companies Swan Telecom Pvt Ltd and Unitech Wireless Ltd in allocating the spectrum. 16 December 2010: SC decides to monitor the CBI inquiry.

2011
4 January 2011: Swamy moves SC seeking cancellation of 2G spectrum licenses. 10 January 2011: Supreme Court issues notice to Centre on the plea seeking cancellation of 2G licenses. Also issues notices to 11 companies which allegedly did not fulfill the roll-out obligations or were ineligible. 30 January 2011: Governments decision to regularise licenses of the companies which failed to meet the deadline for roll-out obligation challenged in the Supreme Court. 2 February 2011: Raja, former Telecom Secretary Siddharth Behura and Rajas former Personal Secretary R K Chandolia arrested and next day they were remanded in CBI custody. 8 February 2011: Raja remanded to two more days of CBI custody. Behura and Chandolia sent to judicial custody. 8 February 2011: Shahid Usman Balwa, promoter of Swan Telecom, arrested by CBI.

cont
10 February 2011: SC asks CBI to bring under its scanner corporate houses which were beneficiaries of the 2G spectrum. Raja remanded to CBI custody for four more days by a special CBI court along with Balwa. 14 February 2011: Rajas CBI custody extended for three more days. Balwas custody extended for four days. 17 February 2011: Raja sent to Tihar Jail under judicial custody. 18 February 2011: Income Tax Department questions Kani Mozhi in Chennai Headquarters. 24 February 2011: CBI tells a Delhi court that Balwa facilitated transaction to Kalaignar TV. 28 February 2011: Raja seeks judicial proceedings through video conferencing stating that he faces threat to life from fellow prisoners. 1 March 2011: CBI tells SC that 63 persons are under scanner. Raja allowed by CBI court to appear before it via video-conferencing. 14 March 2011: The Delhi High Court sets up special court to deal exclusively with 2G cases. Balwa also allowed to appear via video-conferencing.

cont
17 March 2011: SC reserves order on cancellation of 2G licenses. It rejected companies' claim saying that Principle of Estoppelcan't be applied to protect illegality. 29 March 2011: SC permits CBI to file charge sheet on 2 April instead of 31 March. Two more persons Asif Balwa and Rajeev Agarwal arrested. 2 April 2011: CBI files its first charge sheet in the 2G spectrum allocation scam. 25 April 2011: CBI files second charge sheet and court issues summons to Kanimozhi, Sharad Kumar and Karim Morani taking cognizance of the charge sheet. 6 May 2011: Kanimozhi and Sharad Kumar appear before court and file bail pleas while Morani sought exemption from appearance on medical ground. 6 May 2011: SC issues contempt notice to Sahara India managing director Subroto Roy and two others for alleged interference in the ongoing ED investigation into the 2G spectrum case.

cont.
7 May 2011: Special CBI Court reserves order on Kanimozhi and Sharad Kumars bail applications. 14 May 2011: Special CBI Court defers order on their bail pleas for 20 May. 20 May 2011: Special CBI Court rejects bail pleas of Kanimozhi and Sharad Kumar and orders their forthwith arrest saying that there was a possibility of witnesses being influenced considering the magnitude of the crime. 8 June 2011: Delhi HC rejects bail pleas of Kanimozhi and Sharad Kumar citing that there are certain prima facie evidences against the accused and they may be in a position to influence the 2G probe 20 June 2011: SC rejects Kanimozhis bail plea. 25 July 2011: Arguments on Charge begins. Raja seeks to make Prime Minister and former finance minister P Chidambaram as witness. 26 August 2011: Special CBI court allows Subramanian Swamy to argue his own case (mainly to address the possible loop holes in CBI investigation of the case)

Cont.
30 August 2011: Income Tax Department orders freezing of accounts, attachment of properties worth 223 crore (US$40.36 million)of five companies mainly related to DB Realty under the provisions of Prevention of Money Laundering Act (PMLA). September 2011: ED files status report in Supreme Court, says there have been FEMA violation of 10,000 crore. 15 September 2011: Swamy pleads before special CBI court that P Chidambaram should be made co-accused 22 September 2011: CBI defends Chidambaram in SC, blames DoT for all wrongs. 26 September 2011: CBI moves plea for framing fresh charge for criminal breach of trust against Raja, Chandolia and Behura. 29 September 2011: CBI says role of Anil Ambani being probed, gives a virtual clean chit to Tata and Videocon group. 9 October 2011: CBI files FIR against Maran and his brother in Aircel-Maxis deal.

cont.
10 October 2011: SC reserves order against Subramanian Swamys plea for a probe into Home Minister Chidambarams role in the 2G scam. On the same day CBI books former telecom minister and DMK leader Dayanidhi Maran and his brother and media baron Kalanithi Maran 22 October 2011: Special CBI Court finds prima facie evidence to put on trial all 17 accused including Raja on various counts like criminal conspiracy, breach of trust, cheating and forgery. 3 November 2011: Special CBI court dismisses bail pleas of all the 8 applicants (including Kanimozhi). 8 November 2011: Special CBI court orders CBI to give copy of file on sale of equity by telecom companies (for investigating P Chidambaram's involvement) to Swamy. 9 November 2011: Delhi HC refuses to grant interim bail to Karim Morani on health grounds wondering Why everybody falls sick once he is in custody? HC issues notice to the CBI on its reply on the bail pleas of the five accused by 1 December. 11 November 2011: Trial of the 17 accused begins in Patiala House special CBI court. 14 November 2011: UPA govt moves SC seeking to restrain Dr Subramanian Swamy from making public allegations against the UPA leadership (especially Home Minister P Chidambaram and UPA Chairperson Sonia Gandhi) in the 2G scam case 22 November 2011: The Special CBI court shifts the trial to the Tihar Jail complex following a Delhi high court order

23 November 2011: SC grants bail to 5 corporate executives Sanjay Chandra of Unitech Wireless, Vinod Goenka of Swan Telecom as well as Reliance Group's Gautam Doshi, Surendra Pipara and Hari Nayar. 28 November 2011: HC grants bail to DMK MP Kanimozhi and 4 others namely Karim Morani, Sharad Kumar and Asif Balwa and Rajeev Agarwal. The court upheld the principle of parity under Section 144 of the Constitution of India that upholds an order passed by the SC. 29 November 2011: The special CBI court grants bail to Shahid Balwa citing principle of parity that SC and HC have already granted bail to 10 other accused[170][171] 1 December 2011: The special CBI court grants bail to A. Raja's ex-private secretary R. K. Chandolia and puts additional condition to not visit the DoT without prior permission of the court 2 December 2011: Taking a suo motu cognizance, HC stays bail given by trial court to R K Chandolia. 7 December 2011: SC stays HC's suo motu order against Chandolia's bail. 8 December 2011: The special CBI court accepts Swamy's plea against Chidambaram to become a witness in his own complaint and examine 2 witnesses, including senior CBI official and senior Finance Ministry official. 12 December 2011: CBI files third charge sheet naming Essar Group promoters Ravi Ruia, his son Anshuman Ruia and its director (Strategy and Planning) Vikas Saraf, Loop Telecom promoters Kiran Khaitan (sister of Ravi Ruia) and her husband I P Khaitan. It also charge sheets Loop Mobile India Ltd, its subsidiary Loop Telecom Pvt Ltd and Essar Tele Holding. 16 December 2011: HC rejects bail plea of Siddharth Behura saying "he was the perpetrator of the illegal designs of Raja and would not claim benefit of parity with 10 others released on bail"

cont..

2012
2 February: The Supreme court of India cancelled all 122 licenses allotted by A Raja and imposed Rs 5 crore(US$ 1,018,122) fine on Unitech, Swan and Tata Teleservices. It also imposed a fine of Rs 50 lakh on Loop Telecom Pvt Ltd, S-Tel, Allianz Infratech and Sistema Shyam Tele Services Ltd. It also asked trial court to decide whether Home Minister P Chidambaram should be made co-accused in 2G scam. 4 February: The special court of justice O.P Saini dismissed the plea of Subramanian Swamy to make then Finance Minister P.Chidambram as co-accused in the 2G scam. 8 February: ED and I-T registers money laundering case against DMK leader Dayanidhi Maran[185] and his brother Kalanithi Maranfor allegedly receiving illegal gratification of about 550 crore in the Aircel-Maxis deal. 9 February: Essar Group and Loop Telecom approach Supreme Court against its trial before Special CBI Court in 2G case. 15 February: Supreme Court refused to grant interim stay on the summonses issued against Essar Group, Loop Telecom and their officials by a special CBI court to appear before it on 22 February for their alleged involvement in a 2G spectrum scam. 22 February: CBI lodges strong protest with CVC on the "dirty tricks" of certain Income Tax officials to intimidate crucial witnesses in the 2G case allegedly at the behest of DMKs Minister of State (Finance) SS Palanimanickam. Dr. Swamy said he would approach Supreme Court on this matter. 23 February: Subramanian Swamy files petition in Supreme Court challenging trial court's order which had dismissed Swamy's plea to make Union Home Minister P. Chidambaram as a co-accused in the 2G scam. 2 March: Govt of India files review petition in Supreme Court seeking partial review of the court's 2 February 2012 order which had quashed 122 licenses.[192] The Govt questioned Supreme Court's authority over ruling against the first-come first-served policy but stayed away from challenging the cancellation of 122 licences issued during the tenure of A Raja as Telecom Minister.[193] On the same day former telecom minister A Raja, Sistema, majority shareholder in MTS India, Uninor and other telecom companies too filed a review petition in Supreme Court.[194]

Cont
4 April: Other than Government of India's partial review petition Supreme Court dismissed all 10 review petitions.[195] The telecom companies whose review petition was dismissed include Videocon Telecommunications Ltd, S Tel Ltd, Sistema Shyam Teleservices Ltd, Tata Teleservices Ltd, Unitech Wireless (Tamil Nadu) Pvt Ltd, Etisalat DB Telecom Pvt Ltd and Idea Cellular Ltd. 12 April: Government filed presidential reference in Supreme Court seeking the court's opinion on various issues arising from its 2 February 2012 judgement 9 May: Supreme Court granted bail to Siddharth Behuraand upheld RK Chandolia's bail. On the same day A Raja also applied for bail. 15 May: Bail granted to A Raja with a condition to get court's permission for visiting Tamil Nadu[45][46] He walked out of Tihar jail after 15 months. 6 June: Special CBI Court granted permission for Raja to visit Tamil Nadu. 3 July: Briefing the Joint parliamentary committee probing the scam, ED claimed that it has enough evidence to convict DMK chiefKarunanidhi's wife and daughter Kanimozhi. 31 July: Former DoT senior official AK Srivastava confirmed CBI's allegation in his testimony saying A Raja as telecom minister was the final authority for taking decisions on policy matters. He in his statement to CBI earlier had mentioned that Raja had recorded the cutoff date of October 1, 2007 for receiving applications for grant of the 2G spectrum licences on a DoT file.

Cont.
1 August: The Supreme Court, hearing the Presidential Reference on the 2G judgment, said implementation of first served (FCFS) policy for allotment of spectrum was flawed. The Chief Justice of India said, "The moment you change the criterion and distort the policy, it ceases to be FCFS policy. If you insist on making payment at the last minute after changing the cut-off date, then it is not FCFS, it is an out-of-turn policy." 3 August: According to the directions of the Supreme Court, Govt of India revised the spectrum price to 14,000 crore (US$2.53 billion)[7] which demolished the "zero loss theory" and further established 176,000 crore (US$31.86 billion)revenue loss calculated by CAG. 9 August: The Government again sought extension of time from the Supreme Court till November 12 for commencing auction of 2G spectrum licences. The court, while quashing 123 licences in February 2012, had given four months for their fresh auction which was extended till August 31.

Licenses quashed
On 2 February 2012 Supreme Court of India quashed all 122 spectrum licences granted during the tenure of former communications minister A Raja imposed fine of 5 crore on Unitech Wireless, Swan telecom and Tata Teleservices and 50 lakh fine on Loop Telecom ,S Tel , Allianz Infratech and Sistema Shyam Tele Services Ltd The Supreme Court's ruling said the current licences will remain in place for four months, in which time the government should decide fresh norms for issuing licences

After effects of Supreme Court's verdict

Batelco quits India - Batelco , the Bahrain telecommunications company holding 42.7% stake in S Tel declared that it has agreed to sell its entire holding to Indian partner Sky City Foundation Ltd for 65.8 million Bahraini dinar ($174.5 million) Telenor terminates agreement and sues Unitech - On 21 February 2012 Telenor, majority stakeholder in Uninor, terminated its agreement with its Indian partner Unitech and sued it seeking indemnity and compensation Etisalat sues Shahid Balwa and Vinod Goenka - On 23 February 2012 Etisalat of the Etasalat-DB Telecom sued Shahid Balwa and Vinod Goenka , promoters of its Indian partner DB Realty for fraud and misrepresentation