Ahead of the 2G verdict later this month, News18 chronicles and explains in detail a scam which dealt the first blow to the credibility of the UPA government.
It was said to be the biggest scam in the history of Independent India. Time Magazine has called it the second biggest instance of the abuse of executive power- just a notch below Richard Nixon's Watergate scandal.
Exactly ten years back, when the murmurs of wrongdoings were first heard in the corridors of powers in Delhi, the opposition demanded an investigation.
Politically however, irregularities in the allocation of Second Generation spectrum licenses for mobile communication and limited data transmission was too complex a subject for public comprehension or popular political lexicon.
Only when the Comptroller and Auditor General of India in a report quantified and pegged the scam loss to Rs. 1.76 lac crores that the scandal took its own definitive shape and moniker- the 2G Scam.
The case was investigated by the Central Bureau of Investigation which filed an 80,000 page chargesheet before the trial court.
WHAT IS SPECTRUM SCAM?
On 16th November 2010, the Comptroller and Auditor General of India (CAG), the supreme auditing body of the country came out with its report on the issuance of licenses and allocation of 2G spectrum by the Department of Telecom.
CAG, then headed by Vinod Rai, revealed 2G licenses had been issued to telecom operators at throwaway prices causing a loss of Rs 1.76 lakh crore to the exchequer. Moreover, licenses had been issued to ineligible applicants who had deliberately suppressed facts, disclosed incomplete information, submitted fictitious documents and used fraudulent means for getting licenses and thereby access to spectrum.
The CAG report went on to say that licenses owners had in turn sold significant stakes to the Indian/foreign companies at high premium within a short period of time.
The premium earned by these new entrants to the telecom sector was estimated to be the true value of the spectrum.
In a free and fair bidding process, these profits should have accrued to the public exchequer.
THE ALLEGATIONS
The telecom ministry under A Raja changed rules and eligibility criteria several times in the run-up to auction.
The cut-off date of the auction was advanced by the ministry.
The ministry issued licenses on a distorted First Come First Served (FCFS) Policy and that too at 2001 prices, not at 2008 prices.
Officials at the ministry allegedly shut counters to physically block selected telecom companies from entering the fray.
Telecom Minister Raja acted against the advice of TRAI, Law Ministry, Finance Ministry.
The face of the scam was the then telecom minister A Raja. He is alleged to have bent the rules of auction to benefit a few and selective telecom players only.
What was in it for him? CBI in its chargesheet accused Raja of getting Swan's Shahid Balwa to invest in Rs 200 crore into Kalaignar TV Pvt Ltd, a company controlled by some members of the DMK's first family. Raja was a minister in the UPA government from the DMK.
CBI in its charge-sheet has accused DMK Supremo K Karunanidhi's daughter Kanimozhi of being in regular touch with A Raja regarding the launch of Kalaignar TV channels. CBI’s investigation showed Kanimozhi- a sitting Rajya Sabha member- was a key stakeholder in the TV channel.
The CBI and the Enforcement Directorate during their investigations found A Raja had received over Rs 3000 crore as bribe in the allotment of 2G licenses.
OTHER ACCUSED
Unitech chief Sanjay Chandra and DB Realty founder Vinod Goenka: chargesheeted for cheating and conspiracy.
Three senior executives of Anil Ambani controlled DAG, Gautam Doshi, Hari Nair and Surendra Pipara.
Former telecom secretary Sidharth Behura, who allegedly shut counters to physically block other telecom companies, and Raja's Personal Secretary RK Chandolia.
IN NUMBERS
Comptroller and Auditor General of India (CAG) in its 2010 report quantified what was called the biggest scam in the history of Independent India.
Six years ago, 2G scam found its way, at number 2, in an all time ‘Top 10 abuses of power’ list issued by Time magazine. In magnitude it was placed only behind Richard Nixon’s Watergate scandal.
The scam remained front-page news in the national and local dailies for months on end, not just for the waves it created in political and corporate circles but also for its sheer magnitude.
QUANTUM OF LOSS
It was said to be the biggest scam in the history of Independent India. Time Magazine has called it the second biggest instance of the abuse of executive power- just a notch below Richard Nixon's Watergate scandal.
Exactly ten years back, when the murmurs of wrongdoings were first heard in the corridors of powers in Delhi, the opposition demanded an investigation.
Politically however, irregularities in the allocation of Second Generation spectrum licenses for mobile communication and limited data transmission was too complex a subject for public comprehension or popular political lexicon.
Only when the Comptroller and Auditor General of India in a report quantified and pegged the scam loss to Rs. 1.76 lac crores that the scandal took its own definitive shape and moniker- the 2G Scam.
The case was investigated by the Central Bureau of Investigation which filed an 80,000 page chargesheet before the trial court.
WHAT IS SPECTRUM SCAM?
On 16th November 2010, the Comptroller and Auditor General of India (CAG), the supreme auditing body of the country came out with its report on the issuance of licenses and allocation of 2G spectrum by the Department of Telecom.
CAG, then headed by Vinod Rai, revealed 2G licenses had been issued to telecom operators at throwaway prices causing a loss of Rs 1.76 lakh crore to the exchequer. Moreover, licenses had been issued to ineligible applicants who had deliberately suppressed facts, disclosed incomplete information, submitted fictitious documents and used fraudulent means for getting licenses and thereby access to spectrum.
The CAG report went on to say that licenses owners had in turn sold significant stakes to the Indian/foreign companies at high premium within a short period of time.
The premium earned by these new entrants to the telecom sector was estimated to be the true value of the spectrum.
In a free and fair bidding process, these profits should have accrued to the public exchequer.
THE ALLEGATIONS
The telecom ministry under A Raja changed rules and eligibility criteria several times in the run-up to auction.
The cut-off date of the auction was advanced by the ministry.
The ministry issued licenses on a distorted First Come First Served (FCFS) Policy and that too at 2001 prices, not at 2008 prices.
Officials at the ministry allegedly shut counters to physically block selected telecom companies from entering the fray.
Telecom Minister Raja acted against the advice of TRAI, Law Ministry, Finance Ministry.
The face of the scam was the then telecom minister A Raja. He is alleged to have bent the rules of auction to benefit a few and selective telecom players only.
What was in it for him? CBI in its chargesheet accused Raja of getting Swan's Shahid Balwa to invest in Rs 200 crore into Kalaignar TV Pvt Ltd, a company controlled by some members of the DMK's first family. Raja was a minister in the UPA government from the DMK.
CBI in its charge-sheet has accused DMK Supremo K Karunanidhi's daughter Kanimozhi of being in regular touch with A Raja regarding the launch of Kalaignar TV channels. CBI’s investigation showed Kanimozhi- a sitting Rajya Sabha member- was a key stakeholder in the TV channel.
The CBI and the Enforcement Directorate during their investigations found A Raja had received over Rs 3000 crore as bribe in the allotment of 2G licenses.
OTHER ACCUSED
Unitech chief Sanjay Chandra and DB Realty founder Vinod Goenka: chargesheeted for cheating and conspiracy.
Three senior executives of Anil Ambani controlled DAG, Gautam Doshi, Hari Nair and Surendra Pipara.
Former telecom secretary Sidharth Behura, who allegedly shut counters to physically block other telecom companies, and Raja's Personal Secretary RK Chandolia.
IN NUMBERS
Comptroller and Auditor General of India (CAG) in its 2010 report quantified what was called the biggest scam in the history of Independent India.
Six years ago, 2G scam found its way, at number 2, in an all time ‘Top 10 abuses of power’ list issued by Time magazine. In magnitude it was placed only behind Richard Nixon’s Watergate scandal.
The scam remained front-page news in the national and local dailies for months on end, not just for the waves it created in political and corporate circles but also for its sheer magnitude.
QUANTUM OF LOSS