2G spectrum case

The 2G Spectrum Case is an ongoing alleged scam case that the politicians and private officials of the United Progressive Alliance coalition government in India are accused in. 
On 21 December 2017, the special court in New Delhi after thorough examination of the case and hearing what the CBI had to say, acquitted all accused in the 2G spectrum case including prime accused A Raja and Kanimozhi. The court ruled that this case was baseless. As per the judgement, "Some people created a scam by artfully arranging a few selected facts and exaggerating things beyond recognition to astronomical levels."
On 19 and 20 March 2018, the Enforcement Directorate and CBI respectively filed appeals against this verdict in the Delhi High Court.
In Feb 2019, Justice Najmi Waziri ordered the defendants to plant 3,000 trees each for seeking more time to file their responses on the appeal challenging their acquittal in a 2G scam case.
On 5 October 2020, High court will begin day to day hearing.
Background.
India is divided into 22 telecommunications zones, with 281 zonal licenses. In 2008, 122 new second-generation 2G Unified Access Service (UAS) licenses were granted to telecom companies on a first-come, first-served basis at the 2001 price. According to the CBI charge sheet, several laws were violated and bribes were paid to favour certain firms in granting 2G spectrum licenses. According to a CAG audit, licenses were granted to ineligible corporations, those with no experience in the telecom sector (such as Unitech and Swan Telecom) and those who had concealed relevant information. Although former Prime Minister Manmohan Singh advised Raja to allot 2G spectrum transparently and revise the license fee in a November 2007 letter, Raja rejected many of Singh's recommendations. In another letter that month, the Ministry of Finance expressed procedural concerns to the DOT; these were ignored, and the cut-off date was moved forward from 1 October to 25 September 2007.
On 25 September 2007 the DOT announced on its website that applicants filing between 3:30 and 4:30 pm that day would be granted licenses. Although the policy for awarding licences was first-come, first-served, which was introduced during Atal Bihari Vajpayee Government, Raja changed the rules so it applied to compliance with conditions instead of the application itself. On 10 January 2008, companies were given only a few hours to supply Letters of Intent and payments; some executives were allegedly tipped off by Raja. Although the corporation was ineligible, Swan Telecom was granted a license for and sold a 45-percent share to the UAE-based Etisalat for . Unitech Wireless (a subsidiary of the Unitech Group) obtained a license for , selling a 60-percent share for to Norway-based Telenor.
The following is a list of companies who received 2G licenses during Raja's term as telecom minister; the licenses were later cancelled by the Supreme Court:
Accused parties.
The selling of the licenses drew attention to three groups: politicians and bureaucrats, who had the authority to sell licenses; corporations buying the licenses, and professionals who mediated between the politicians and corporations.
Politicians.
The following charges were filed by the CBI and the Directorate General of Income Tax Investigation in the Special CBI Court.
Bureaucrats.
A number of bureaucrats were named in the CBI charge sheet filed in its Special Court.
Executives.
A number of executives were accused in the CBI charge sheet.
Corporations.
Several companies were named in the CBI charge sheet.
Media role.
"OPEN" and "Outlook" reported that journalists Barkha Dutt (editor of NDTV) and Vir Sanghvi (editorial director of the "Hindustan Times") knew that corporate lobbyist Nira Radia influenced Raja's appointment as telecom minister, publicising Radia's phone conversations with Dutt and Sanghvi when Radia's phone was tapped by the Income Tax Department. According to critics, Dutt and Sanghvi knew about the link between the government and the media industry but delayed reporting the corruption.
Chronology.
The Centre for Public Interest Litigation filed the first petition against the Union of India for irregularities in awarding 2G spectrum licenses. The petition alleged that the government lost $15.53 billion by issuing spectrum in 2008 based on 2001 prices, and by not following a competitive bidding process. This led to further petitions, and an investigation began in 2010.
Licence cancellations.
On 2 February 2012 the Supreme Court ruled on petitions filed by Subramanian Swamy and the Centre for Public Interest Litigation (CPIL) represented by Prashant Bhushan, challenging the 2008 allotment of 2G licenses, cancelling all 122 spectrum licences granted during Raja's term as communications minister. and described the allocation of 2G spectrum as "unconstitutional and arbitrary". The bench of GS Singhvi and Asok Kumar Ganguly imposed a fine of on Unitech Wireless, Swan Telecom and Tata Teleservices and a fine on Loop Telecom, S Tel, Allianz Infratech and Sistema Shyam Tele Services. According to the ruling the current licences would remain in place for four months, after which time the government would reissue the licences.
In its ruling the court said that former telecom minister A. Raja "wanted to favour some companies at the cost of the public exchequer", listing seven steps he took to ensure this:
Companies affected by cancellations.
The table below lists the companies whose license were cancelled.
Aftermath.
In addition to Batelco's exit, on 21 February 2012 Telenor (the majority shareholder in Uninor) terminated its agreement with Unitech and sued it for "indemnity and compensation". On 23 February 2012, Etisalat of Etasalat-DB Telecom sued DB Realty corporate promoters Shahid Balwa and Vinod Goenka for fraud and misrepresentation.
After the special CBI court verdict on 21 December 2017 acquitting all the accused, the government faces compensation claims worth over Rs 17,000 crore from telcos like Videocon Telecom, Loop Telecom and STel who suffered loss of business after the Supreme Court scrapped 122 licences in 2012.
Aircel-Maxis deal controversy.
On 6 June 2011 former Aircel chief C. Sivasankaran complained to the CBI about not receiving a telecom licence and being forced by telecom minister Dayanidhi Maran to sell Aircel to the Malaysia-based Maxis Communications group, owned by T. Ananda Krishnan. The licences were allegedly issued after the deal was made. Sivasankaran also alleged that brothers Dayanidhi and Kalanithi Maran received kickbacks in the form of investments by the Maxis group through the Astro network in Sun TV Network, owned by the Maran family. In the wake of the allegations, Maran resigned on 7 July.
On 10 October, the CBI registered a case and raided properties owned by the Marans. CBI sources said that although no evidence of coercion was found in the Aircel sale, they found substantial evidence that Maran had favoured the company's takeover by Maxis and deliberately delayed Sivasankar's files. On 8 February 2012, the Enforcement Directorate registered a money-laundering case against the Maran brothers for allegedly receiving illegal compensation of about 5.5 billion in the Aircel-Maxis deal.
During the CBI probe Sivasankaran said that the Maran brothers had forced him to sell his 74% share in Aircel to Maxis by threatening his life, giving the CBI a list of over 10 witnesses. In September 2012, the CBI said it finished its Indian investigation and was awaiting the response to a letter rogatory sent to Malaysia and a questionnaire from T. Ananda Krishnan before filing a chargesheet. On 29 August 2014, the CBI filed a chargesheet against Dayanidhi Maran, his brother Kalanithi Maran, Malaysian businessman T Ananda Krishnan, Malaysian national Augustus Ralph Marshall, six others and four firms — Sun Direct TV Pvt Ltd, Maxis Communication Berhad, Astro All Asia Network PLC and South Asia Entertainment Holding Ltd as accused in the case. On 29 October 2014, special CBI judge OP Saini said that he found enough evidence to proceed with the prosecution and hence summoned former telecom minister Dayanidhi Maran and others as accused. Based on the CBI chargesheet, the Enforcement Directorate (ED) on 1 April 2015, attached Maran brothers' properties worth Rs 742 crore.
Subramanian Swamy alleged that in 2006 a company controlled by Karti Chidambaram, the son of Minister of Finance P. Chidambaram, received a five-percent share of Aircel to get part of 40 billion paid by Maxis Communications for the 74-percent share of Aircel. According to Swamy, Chidambaram withheld Foreign Investment Promotion Board clearance of the deal until his son received the five-percent share in Siva's company. The issue was raised a number of times in Parliament by the opposition, which demanded Chidambaram's resignation. Although he and the government denied the allegations, "The Pioneer" and "India Today" reported the existence of documents showing that Chidambaram delayed approval of the foreign direct investment proposal by about seven months.
In July 2018, the CBI named P Chidambaram and Karti Chidambaram as accused in its supplementary charge sheet. The charge sheet named 16 other co-accused, including former finance secretaries Ashok Chawla, Ashok Jha, former Aircel CEO V Srinivasanand, Maxis owners T Ananda Krishnan and Ralph Marshal.
Response to the allegations.
When Indian media began citing the CAG report identifying the loss at 1.76 trillion (short scale), the Indian opposition parties unanimously demanded the formation of a joint parliamentary committee to investigate the allegations. Although the government rejected their demand, when the winter session of Parliament began on 9 November 2010 the opposition again pressed for a JPC; again, their demand was rejected. The demand for a JPC gained further momentum when the CAG report was tabled in Parliament on 16 November 2010. The opposition blocked the proceedings, again pressing for a JPC; the government again rejected their demand, creating an impasse. Speaker of the Lok Sabha Meira Kumar unsuccessfully attempted to resolve the impasse. The winter session of Parliament concluded on 13 December 2010. Although 22 new bills were planned to be introduced, 23 pending bills passed and three bills withdrawn, Parliament functioned for only nine hours. On 22 February 2011, after resisting opposition demands for over three months, the government announced that it would form a JPC. The JPC criticised the CBI for its leniency to the PM, the Attorney General, Dayanidhi Maran and Chidambaram and its reluctance to investigate their roles on 24 July 2012. After questioning former telecom minister Dayanidhi Maran, his brother Kalanithi and the head of Maxis Communications, the CBI alleged that the Maran brothers accrued an illegal 5.50 billion by the sale of Sun Direct TV shares at highly "inflated prices".
In early November 2010 Jayalalithaa accused state chief minister M Karunanidhi of protecting Raja from corruption charges, calling for Raja's resignation. By mid-November, Raja resigned. At that time, comptroller Vinod Rai issued show-cause notices to Unitech, S Tel, Loop Mobile, Datacom (Videocon) and Etisalat to respond to his assertion that the 85 licenses granted to these companies did not have the capital required at application or were otherwise illegal. It was speculated that because these companies provide some consumer service, they would receive large fines but retain their licenses.
In June 2011 Prime Minister Manmohan Singh criticised the CAG for commenting on policy issues, warning it "to limit the office to the role defined in the constitution." After Singh's criticism the CAG conducted a "rigorous internal appraisal" and stood by its findings, citing additional events as corroboration. The CAG reiterated that there was "an undeniable loss to the exchequer", the calculation of which was based on three estimates: the 3G auctions and the Swan and Unitech transactions. It cited the Supreme Court ruling of 2 February 2012 that the actions of Raja and officers at the Department of Telecom were "wholly arbitrary, capricious and contrary to the public interest, apart from being violative of the doctrine of equality. The material produced for the quote showed that the Minister for C&IT wanted to favour some companies at the cost of the public exchequer." It said its estimate of loss of 1.76-lakh crore was justified, since the May 2012 TRAI collation of reserve prices for 2G spectrum was about the same as that in the November 2010 CAG report. TRAI had recommended a reserve price for 2G spectrum of 180 billion for a pan-India 5 MHz licence, higher than the 3G value of 167.50 billion for 5 MHz used by the CAG for arriving at a loss figure of 1,760 billion. It concluded that it was only examining the "implementation of policy", and policy-making was the government's prerogative.
Joint parliamentary committee.
The JPC consisted of half United Progressive Alliance members and half opposition members. Twelve were from the Lok Sabha, and eight from the Rajya Sabha. Of the Lok Sabha MPs, eight were from the Congress Party and four from the BJP. The following JPC members investigated the 2G allegations:
Verdict.
On 21 December 2017, a Special CBI Court acquitted all the persons accused in the case.