CVC confirms corruption in 2G Spectrum allocations to Telecom companies.

The Chief Vigilance Commissioner has confirmed large-scale irregularities by the Telecom department in awarding licences for 2G spectrum services, and said it would soon fix responsibility for the lapses. In an exclusive interview to The Pioneer, CVC Pratyush Sinha said his organisation had found “gross violation” in the “non-transparent” methods adopted in licence allotments.

The Pioneer had through a series of reports recently exposed violation of rules and regulations in the 2G issue and the role allegedly played by the Telecom Ministry headed by the DMK’s A Raja.“We have found that there were gross violations and non-transparent activities in the allocation of 2G spectrum. Basically, the violations are: Granting licences on first-come- first-serve basis; licences being issued in 2008 at prices fixed in 2001, companies such as Swan and Unitech offloading their shares at whopping prices to foreign companies soon after the licences were awarded to them,” said the CVC. He said these steps had led to heavy losses for the national exchequer.

Sinha wondered why the Telecom department had not opted for the auction route. “The Telecom department says they had adhered to the TRAI (Telecom Regulatory Authority of India) guidelines. We found this version totally wrong. The department had used cherry-picking or pick-and-choose theory suit to their intentions. They selectively picked TRAI recommendations that suited them,” he said.

“We had already sent our findings to the department for clarification and fixing responsibility. We are not at all satisfied with their clarification and justification on the allocation 2G spectrum,” said the CVC, adding that they were in the process of “fixing responsibility”. The CVC also blamed the department for not insisting on a ‘lock-in period’ for the licence-holders to prevent speculative sales. In its report, the CVC blamed the department for exclusion of clauses in the licence agreement that would have prevented ‘offloading' of shares by the company.

The controversy over 2G spectrum allocation broke out when the Telecom department gave licences to new players like Swan and Unitech in October last year. These two real estate developers bagged the licences at throwaway prices. Swan got the licence for Rs1,537 crore for starting telecom operations in 13 circles in mid-2008. Within months, Swan offloaded its 45 per cent of the share to UAE-based Etisalat for Rs 4,500 crore, making a whopping profit.

Similarly, Unitech bagged the licence for Rs 1,651 crore for operating in 22 telecom circles. It too sold 60 per cent of the shares to Norwegian company Telenor, which is currently providing telecom services in Pakistan and Bangladesh, at a high price of Rs 6,120 crore.

[The writer is Special Correspondent of 'The Pioneer' daily]

[This article published in 'The Pioneer' on April 25, 2009]