2G SPECTRUM SCAM

PRESENED BY: GROUP 1 AALIYA PIRZADA ANSHUL SHAH ANUJA SHAH

WHAT IS 2G SPECTRUM?• 2G is short for second-generation wireless telephone technology.

Second generation 2G cellular telecom networks were first commercially launched on the GSM standard in Finland by Radiolinja in 1991.

• Three primary benefits of 2G networks over their predecessors were that phone conversations were digitally encrypted.

• 2G systems were significantly more efficient on the spectrum allowing for far greater mobile phone penetration levels; and 2G introduced data services for mobile, starting with SMS text messages.

WHO ALLOTES 2G SPECTRUM TO COMPANIES

• As it is National property , people have right over it.• As government is divided for the administrative purposes, it is

the onus of telecommunication ministry to allocate to various telecom companies and income generated should be used for the welfare of the people

INTRODUCTION TO SCAM• The 2G spectrum scam was an Indian

telecommunications scam and political scandal in which politicians and government officials under the Congress government undercharged mobile telephone companies for frequency allocation licenses, which they then used to create 2G spectrum subscriptions for cell phones

• The scam allegedly began in 2008 when nine telecom companies were issued scarce spectrum and licenses for Second Generation (2G) mobile phone services arbitrarily.

• In 2008, 122 new second-generation (2G) Unified Access Service (UAS) licences were given to telecom companies at a price arrived at in 2001 and on a first-come-first-serve basis.

QUASHING OF 2G SPECTRUM LICENCES• On February 20, 2012, the Supreme Court of India delivered a judgement on a

PIL, Declaring the allotment of spectrum as "unconstitutional and arbitrary", the court quashed all 122 licences issued in 2008 by the then minister for communications and IT, A. Raja.

• Imposition of fine of Rs 5 crore each on Unitech Wireless, Swan telecom and Tata Teleservices

• Rs 50 lakh fine on Loop Telecom, S Tel, Allianz Infratech and Sistema Shyam Tele Services Ltd.

• As per the court A. Raja "wanted to favour some companies at the cost of the public exchequer" and "virtually gifted away important national asset“

• In 2011, Time magazine listed the scam at number two on their "Top 10 Abuses of Power" list

TIMELINE• October 22, 2009 : CBI filed FIR against unidentified officials of

telecommunication department involved in 2g scam• November 2010 : Report of Contents about 2g scam was

established by CAG that mentioned the notional loss of 176 lakh crore

• November 9. 2010 : Protest by National Democratic Alliance and opposition parties that demanded for Joint parliamentary committee to investigate the scandal

• November 14, 2010 : Raja Submitted resignation to PM• November 16, 2010: Report on 2g spectrum in both houses of

parliament by CAG• December 8, 2010 : Government raides the house of A Raja and

other accused.

• December 24, 2010: CBI questioned RAJA in New Delhi.• February 2, 2011 : CBI arrested Raja , Chandolia and

Beruha.• April 2, 2011: CBI filed charge against nine people and three

firms’• April 20. 2011 : City court denied bail to Goenka. Chandra ,

Doshi. Nair and Pipara• June 20, 2011: Kanimozhi’s Bail plea was rejected by

Supreme Court• July 6. 2011: CBI filed a status report in the supreme court,

alleging that Maran had forced telecom promoter Shri Shivshankaran, to sell his Aircel; stake to Maxis group

• July 7, 2011: Maran resigns from the union Cabinet

MAIN ACCUSED POLITICIANS•A. RAJA Believed to have received Rs 3,000 crore as

bribe to bring forward the cut-off date for applications for the spectrum from the initial October 1, 2007, to September 25, 2007

 The investigating agencies claim that he used bank accounts under his wife's name in Mauritius and Seychelles to channelise the kickbacks he received

Charged with criminal breach of trust by a public servant, criminal conspiracy, cheating and forgery

Was arrested under the Prevention of Corruption Act and was sent to Tihar jail on May 9, 2012

Granted bail on May 15, 2012.

•M. K. Kanimozhi: Daughter of former Tamil Nadu chief minister M.

Karunanidhi, Kanimozhi The CBI alleges that Kanimozhi was an

"active brain" behind the channel's operations and that she worked with A. Raja to get DB Realty promoter Shahid Balwa to circuitously route Rs 200 crore to Kalaignar TV.

Accused of criminal conspiracy to cause criminal breach of trust by a public servant, criminal conspiracy, cheating and forgery.

Booked under the Prevention of Corruption Act and arrested on May 20, 2011 and was granted bail on November 28, 2012 after spending 188 days in judicial custody in Tihar jail

BUREAUCRATS ACCUSED

• SIDDHARTH BEHURA• CBI alleges that when the application

deadline time was declared as between 3:30 pm to 4:30 pm, Behura allegedly shut counters to physically block other telecom companies.

• Charged with criminal breach of trust by a public servant, criminal conspiracy, cheating and forgery.

• Arrested by CBI on February 2, 2011, and got bail May 9 2012.

• RK CHANDOLIAA Raja's private secretary RK Chandolia reprotedly conspired with Behura to shut the counters.

• Charged with criminal conspiracy to cause criminal breach of trust by a public servant, criminal conspiracy, cheating and forgery.

• Arrested on February 2, 2011, and got bail on Decembe 1,

2011.

BUSINESSMENSHAHID BALWAShahid Balwa, the promoter of DB Realty & Swan Telecom, was accused of conspiring to cause criminal breach of trust by a public servant, criminal conspiracy, cheating, forgery and

fabrication of evidence.• Arrested on February 8, 2011, and got bail on November 29,

2011.

OTHER NAMES INVOLVED 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.Asif Balwa (younger brother of Shahid Balwa), Director, Kusegaon Fruits and Vegetables.Rajiv Agarwal, Director, Kusegaon Fruits and Vegetables.Sharath Kumar, Managing Director, Kalaignar TV.Ravi Ruia, Vice Chairman, Essar Group.Anshuman Ruia, Director, Essar Group.Vikas Saraf, Director for strategy and planning, Essar Group.IP Khaitan, Promotor, Loop Telecom.

REASONS FOR 2G SCAM

•POLITICAL REASONS• High spending in the elections, resorts to corruption• After huge expenditures , when are elected, they are recovering the

money, they have put in the elections• Least care about the people who elected them• No regulation for the Members of the Parliament• They have some benefits as they are representatives of the biggest

democracy and it is being misused by them.

BUSINESS REASONS• Businessmen sponsor politicians when in fray.• They seek some concession from politicians after elections• Politicians work for businessmen in their offices• Businessmen sponsoring politicians , business turned politicians are in the

forefront of making scams.

MEDIA REASONS• Growing media activism id throwing open for crooked and worm natured

people.• Commercialization of Newspaper.• Media is being honoured and having direct relation with political leaders

leading to connive jn their activities

BUREAUCRATIC REASONS• Independence of civil servants is no more.• Submissive to the political bosses• Afraid of being transferred if they donot co-operate• Yearly. 5 to 6 transfers related to honest officers• Courts donot interfere, Administrative Tribunals cannot help.• Civil servants are the silent spectators• Behura , arrested in 2g scam was telecommunication secretory

, not for his dishonesty but only signing 100 letters of issuance licences

POLITICAL CRISES AFTER SCAM• Standoff between Government and opposition continued• Opposition wanted a joint Parliamentary Committee( JPC) to investigate a

2g scam• Parliament did not function the entire winter session.• Niira Radia, a corporate lobbyist for big corporate leaders like TATA

group, Reliance Industries seemed to be involved in 2g scam• Opposition did not allow the house to work till JPOC was announced.

RECOVERY• CPI reiterated its demand for the cancellation of licenses

of those private teleco’s who got the spectrum through first come first serve.

• As per General secretary Prakash Karat “ Merely arresting people was not enough. Government must cancel the licenses and auction the spectrum so that the revenue losses can be recovered.

• CPI was first to point out the biggest scam• Opposition parties compelled for 2 things• 1) Appointment of JPC to inquire the matter• 2) Dismissal of Communication Minister A RAJA• Relations between Ministers and civil servants was formed with a

limitation of transfers

CONCLUSION• Indian government is dealing with the scam rather than the

reasons behind it,• Loopholes in the system needs to be corrected order to avoid

the scams• If not dealt, so many scams are there on the way• A perfect policy making and new blood in the political veins

can only help India to be out of scam area.• Save the media from rotting through cheques and balances• Culture of sponsoring politicians through businessmen should

be stopped.• People should be aware of the consequences of weak

government and must enable strong government.