The 2G Spectrum Scam from scratch

2G Spectrum, A Raja, Radia tapes – my mind used to wobble at the very sight of these words in the newspapers since about a year, and never did I take the trouble to enlighten myself with the 2G spectrum scandal until recently and there are so many things happening in my own country which I am unwary of that I had started feeling a bit ‘un-Indian’! But the ‘googling’ and ‘wiking’ brought back the Indian in me. Read further to know the A to Z of the scam.

The government of India, and for that matter the government of any other country, considers the radio frequencies as their national asset; which means any telecom company will have to pay certain price for their radio frequency traffic in air. The companies can use only a certain range of frequencies which are allotted to them by the government itself. Since the number of companies demanding these ranges are more than the available range, so the Ministry for Communication and Information Technology auctions these ranges to various companies.

During the 2008 issuing of 2G spectrum (spectrum just refers to the band of frequencies) licenses the Ministry of Communication instead of auctioning the licenses distributed the same on a 'First-Come-First-Served' basis. 9 telecom companies had benefitted out of the distribution which included top brands such as Vodafone, Tata, Reliance Communications, MTS, etc. Unitech Group and Swan Telecom were two companies which were new in the market without a single subscriber and issuing of spectrum to these companies further added to the hue. A. Raja, the then Minister of Dept. of Telecom, arranged the sale of the 2G spectrum licenses below their market value. Raja ignored the advice of TRAI (Telecom Regulatory Authority of India) which had recommended auctioning of spectrum starting at market rates. Entry fee for spectrum licenses in 2008 was pegged at 2001 prices. Mobile subscriber base had shot up to 35 crore in 2008 from 40 lakh in 2001, so no scaling of prices seemed insane. Unitech Group, a company which formerly used to invest in real estate and not telecom purchased the license for 1,661 crore and the company board soon after sold a 60% stake for 6,200 crore to a third company. The fact that the licenses were resold soon after their issue from the government clearly shows foul play. Similarly, Swan Telecom bought a license for 1,537 crore and shortly thereafter, their board sold 45% of the company for 4,200 crore. These two companies made profit without having a single subscriber under their banner. Tata sold its 26% shares to a Japanese company, DoCoMo. Nine companies purchased licenses and collectively they paid the Ministry of Communications and Information Technology 10,772 crore. The amount of money expected for this licensing by the Comptroller and Auditor General of India (the person who is responsible for the treasury of the Indian Government) was 1,76,700 crore. A deficit of 1,65,928 crore or 16,59,28,00,00,000 was calculated.

All this would have gone unnoticed had the CVC (Central Vigilance Commission – a governmental body created to address governmental corruption) not put its nose in. The CVC found some irregularities in the reports submitted by the Telecom Ministry and delays in replies to queries raised by the CVC. The matter forced the Commission to conduct a direct enquiry into the allocation of spectrum. The initial investigations conducted by the CVC found that licenses were given to companies who did not comply with eligibility criteria (referring to Unitech and Swan). The case was handed over to the CBI for further investigations. Now the stepping in of CBI steamed up matters. In October 2009 CBI raided the DoT (Department of Telecommunication) office and lodged a case against it. It was then that Manmohan Singh came to the scene. He tried to defend the charges against A Raja saying that he had done no wrong deed. The opposition, BJP, didn’t miss their chance of making a statement saying that the PM should stay away from the CBI proceedings.

Calm had descended, as the case wasn’t seeing much of a progress, which was the silence of an oncoming storm. In April 2010, uproar took place in the Parliament when the news of a lobbyist’s, Niira Radia, phone tapping was revealed. The tapes confirmed her acquaintance with A Raja and her conversations with influential businessmen, politicians and advertising professionals. It was also clear from the tapes that Radia had brokered deals for Tata and Reliance Communications during the allocation of spectrum. The Radia tapes controversy was about the tapping of the phone of a high profile person. But the Indian Income Tax department had tapped Radia's phone lines for 300 days in 2008-2009 only after getting authorization from the Ministry of Home Affairs.

The auctioning of 3G spectrum in May 2010 fetched the government 67,718 crore compared to 10,772 crore which the 2G spectrum ‘distribution’ had brought home. The suspicion of gross under-pricing during the latter was cementing. Though, apart from all this A Raja was getting a lot of support from his party’s ministers. Karunanidhi deserves a mention for his frequent statements defending Raja. But the opposition wanted Raja to step down. A Raja was determined to stand strong. It didn’t help long, though. November 2010 saw the reluctant resignation of Raja from the ministry. “In order to avoid embarrassment to the government and maintain peace and harmony in Parliament, my leader M Karunanidhi has advised me to resign,” Raja told newspersons. He proclaimed that his resignation should not be interpreted as an acknowledgement of guilt, claimed his conscience was clear and aggressively defended his performance as minister, claiming he had brought about a telecom revolution and “done much for the country and the people”. He had also remarked earlier that the 2G spectrum allocation was done as per the law only. Kapil Sibbal has now been made the minister of Telecom Department

During all this commotion, the Janta Dal leader Subramanium Swamy kept writing letters to the PM seeking sanction to prosecute A Raja in the scam, but according to him all he got in reply were acknowledgements and a letter stating that it is "premature" to consider sanction for prosecution at this stage due to an on-going CBI inquiry into the matter. So Subramanium Swamy filed a petition in the Supreme Court against the Prime Minister, questioning his silence in the matter. Prime Minister Manmohan Singh again came under the limelight when Supreme Court asked the government to explain why the “sanctioning authority” — in this case, the prime minister — remained silent for 11 long months over a request seeking sanction for the prosecution of former telecom minister A Raja in the 2G spectrum scam case. The PM office submitted a 11-page long affidavit in this regard, telling that the case was under CBI and the PM need not have intervened. Breaking his silence on the 2G scam, the PM promised action against anybody for any “wrong thing” done. “There should be no doubt in anybody's mind that if any wrong thing has been done by anybody, he or she will be brought to book,” Dr Singh said.

As of now, CBI has arrested A Raja, Raja's personal secretary R K Chandolia, former telecom secretary Siddharth Behura, K Sridhar and DoT deputy director general A K Srivastava for questioning.