Violations, Timeline in 2G Spectrum Scam

I am just outlining the violations/timeline of the 2G Spectrum Scam and other related telecom scandals. This is just a synopsis of the biggest scam the country witnessed.

# A Raja becomes Union Minister for Environment and Forests in May 2004 and shifts to Ministry of Communications and IT on May 16, 2007. Raja’s friendly real estate companies want to become telecom operators and he informs his decision to Telecom Secretary DS Mathur for granting new licenses and spectrum to new players. But Mathur objects and argues for transparent auction and competitive pricing (as recommended by TRAI from 2003 onwards). Raja wants to grant licenses as per First-Come-First-Serve method (in a peculiar way – who first pays license fee and not who first applied) and old pricing fixed in 2001. In 2001, there were only four million mobile subscribers and it crossed 350 million in mid 2007. So Manju Madhvan, Member (Finance) of DoT, Finance Ministry also pointed out new competitive prices. But all ignored by Raja and he sent the file to Law Ministry for opinion and started procedures.

# On September 24, 2007 DoT issues a press release (released in the late evening and appeared in next day newspapers), citing the last date of application (cut-off date) fixing to October 1, 2007.

#Without Cabinet approval Raja allots Dual Policy or Cross Technology to Reliance Communications, Tata Teleservices and Shyam Telecom in October 2007 at a rate fixed in 2001. This technology allows CDMA operators to change to much wanted GSM Technology. CDMA operators were in bad shape and Raja’s decision became a boon to them. Here the corruption part is on allowing the much wanted GSM license at a six year old price. This move is Raja’s first major corruption in Telecom, which gave him courage to go ahead with 2G Spectrum allocation to new companies.

# On Nov 1, 2007, the Law Minister HR Bhardwaj rejects Raja’s plan and directs to constitute an Empowered Group of Ministers (eGoM) to form transparent procedures for 2G Spectrum allocation and new licenses.

# Next day on Nov 2, 2007, by 8pm Raja wrote a letter to Prime Minister, objecting on Bhardwaj’s direction. “Law Ministry is out of context,” wrote Raja. This letter was delivered to PM’s residence

# Within an hour (9pm), same day (Nov 2, 2007) – might be alerted by Bhardwaj- PM wrote to Raja to stop all procedures and directs him to get his concurrence in all future actions. This letter was delivered to Raja’s residence. Citing several wrong practices in the past, PM directs Raja to adopt transparent method by auction and new pricing.

# In the mid night, Raja gave an evasive rely to PM, hushing up the directions for auction, competitive pricing. This letter dated Nov 2, 2007 was also delivered to PM’s residence

# A very senior Law Officer (doing all unlawful activities and advisor to all illegal activities) was present in Raja’s residence on Nov 2, 2007 from 7pm to 11:30pm. He drafted all the two letters to Prime Minister by Raja. He was elevated in UPA-2 due to his nexus with all unholy elements in politics and corporate world. How a Law officer can advise against Law Minister’s direction? Rule 8(1)(e) of Law Officers (Conditions of Service) Rules 1972 says : “A Law Officer ( includes AG/SG/ASG or any other law officer) shall not advise any Ministry or Department of Government of India or any statutory organization or any PSU unless the proposal or a reference in this regard is received through Ministry of Law and Justice, Department of Legal Affairs.

# Finance Secretary Mr. D. Subba Rao wrote to Telecom Secretary Mr. DS Mathur on November 22, 2007 – objecting the pricing policy of 2G Spectrum and arguing for auction. In the letter the Finance Secretary objected the dual policy (cross technology) implemented (2\Oct 2007) to help CDMA operators like Reliance and TATA to more revenue earning GSM technology at a cheap rate fixed in 2001, without cabinet approval.

# Regarding this controversial allotment of dual policy (This was Raja’s first big corruption in Telecom Ministry), in the November 2, 2007 late night letter PM said to Raja : “I came thorough the media on the allotment of dual policy or cross technology)

The CAG report says around Rs.36,000 crore lost over this allotment of dual policy which benefited mainly Reliance and TATA. There is a separate headline : “undue influence to Reliance” in the CAG report which figures the total loss to Rs.1.76 Lakh crores, including the loss on the dual technology.

# Strong resistance by Telecom Secretary DS Mathur and Manju Madhavan prevents Raja from moving ahead. For suggesting series of steps for auction, Raja snubs Manju Madhvan, in an internal note dated Dec 4, 2007 who took VRS soon.(she applied well earlier).

# After 50 days, on Dec 26, 2007, Raja wrote a letter to PM, saying that he was “further enlightened” by Pranab Mukherjee (then External Affairs Minister) and G Vahanvati (then Solicitor General) to go ahead with “pre-emptive and pro-active” decision to allot 2G Spectrum and new licenses. In these letters also Raja argues for reversing the cut-off date o limit the players. PM did not reply, but simply gave a routine acknowledgement on Jan 3, 2008.

# On Dec 31, 2007, DS Mathur retires. Raja brings his trusted man Siddarth Behura as new Telecom Secretary, who worked as an Addl. Secretary with him Ministry of Environment and Forests. Within 10 days (Jan 10, 2008) at 2:45pm DoT uploads a press release saying that cut-off date was reversed from October 1, 2007 to September 25, 2007. The press release asked the new players to remit fee (huge money ranging from Rs.1500 cr- Rs.1600 cr) between 3:30pm -4:30pm on same day. It is a mystery that how Nine new companies made and remitted huge fee by demand draft within 45 minutes.

#Here is the conspiracy angle. All the nine company owners/brokers were had a meeting with Raja on Jan 9, 2008 at his residence. All were informed by Minister 24 hours before the issue of press release. The cut-off date was reversed to September 25, 2007, because of Raja’s favorite company Unitech applied on Sept 24. Another favourite company Shyam Telelink also applied on Sept 24.

# On Jan 10, 2008, the CEOs Swan and Unitech (most favoured companies of Raja) sit at Private Secretary RK Chandolia’s cabin in Sanchar Bhavan. DDG Access Service (AK Srivastava) directs officials to go Chandolia’s cabin at 3pm. Chandolia asks official o collect application and demand draft from CEOs and directs to give No : 1 status to Swan and No : 2 status to Unitech. Then only counter was opened at eighth floor of Sanachar Bhavan to receive application/ fee from other seven companies. There was a mad rush to become first in the queue and physical fight taken place between rivals. Bouncers were brought. CEOs were quarreled each other some telecom officers were manhandled.. Though police arrived, no case was registered by instruction of Chandolia.

#TRAI Chairman Mr. Nripendra Misra’s letter to Telecom Secretary Siddharth Behura on January 14, 2008 – objecting the policy, reversal of cut-off date and manipulating his recommendations. Later in the media Misra described DoT had “cherry picked” his recommendations.

#As per the Sec 11(1)(a)(ii) and Sec 11(1)(d) of the TRAI Act, DoT is mandated to get the recommendation of TRAI, if they issue license to new operators. But Raja never sought recommendation of TRAI when he allotted license to new operators like Swan Telecom – changed name to Etisalat DB Telecom, Unitech group companies changed name to Uninor, Loop Telecom (license was granted in the name of Shipping Stop Dotcom India Pvt Ltd!!!!!), Datacom – changed name to Videocon, STel and Allainz Infra (merged/amalgamated with Etisalat later with their license in 2 circles…any smell of corruption or conspiracy?. Let CBI or ED investigate)

#DoT allots spectrum/licenses (including additional spectrum to existing players to settle anger) on March/April 2008. All files were signed by Raja. Unitech applied licenses in different names - Unitech Infrastructure, Unitech Builders and Estates, Aska Projects, Nahan Properties, Hudson Properties, Volga Properties, Adonis Projects and Azare Properties. Later Unitech Group forms eight companies – Unitech Wireless (Tamil Nadu), Unitech Wireless (North), Unitech Wireless (South), Unitech Wireless (Kolkata), Unitech Wireless (Delhi), Unitech Wireless (East), Unitech Wireless (Mumbai), Unitech Wireless (West).

#Dubious order was issued by Siddhart Behura on April 22, 2008 for facilitating merger (leaving the word acquisition). This helped Unitech to merge all their licenses and helped all to waive the mandatory three year lock-in-period in selling of their shares.

# On Sept 13, 2008, Raja forces BSNL CMD Kuldip Goyal to enter into a un-precedented MoU with Swan, known as Intra-Circle Roaming Agreement. This MoU will help Swan to use all infrastructure (Towers, optical network etc) of BSNL. This MoU was executed just a week before, Swan’s Rs.4500 Cr deal (sale of 45 per cent shares) with Etisalat. Swan gives unsolicited application to BSNL. The BSNL management committee demands 52 paise/call from Swan. But this clause was absent in the MoU. Raja also transfers senior officials in WPC (Joint Wireless Adviser RJS Kushwaha and Deputy Wireless Adviser D Jha) for objecting Swan’s proposals to BSNL and DoT.

# In Sept/October 2008 – Swan offloads 45 per cent shares to UAE based Etisalat for Rs.4500 Cr. (Swan got license for Rs.1530Cr). Etisalat invested Swan through its Mauritius unit. Unitech offloads 60 per cent of shares to Norway based Telenor for Rs.6200Cr. (Unitech got license for Rs.1621 cr). Telenor invested through its South-Asia division. Telenor is a major operator in Pakistan and Bangladesh.

# On Nov 4 2008, Swan informs DoT that - it allotted Rs.380Cr worth shares (9.9%) to a Chennai based newly floated company Genex Exim. This is believed to the kick back from Swan to Raja. Genex was incorporated on September 17, 2008, with two directors — Mohammed Hassan (58) and Ahamed Shakir (41). The company was represented by Ahmed Syed Salahuddin (32) on the board of Swan. The three belong to Kilukarai, a small coastal village in Ramanathapuram district of Tamil Nadu. The Tamil Nadu link now gets strengthened. Ahmed Syed Salahuddin is the younger son of Syed Mohammed Salahuddin, an NRI business tycoon heading the Dubai-based real estate conglomerate, ETA Ascon Star Group. This was part of the letter to DoT informing the Rs.4500 crore deal with Etisalat.

# ETA Group had several real estate projects cleared (on in Bangalore) during Raja’s stint in Environment Ministry. More over the ETA owner Syed Mohammed Salahuddin is having four decade long association with Tamil Nadu Chief Minister M.Karunanidhi. Most of the Fly Overs, new Secretariat complex were built by this man, who was also a distributor of Karunanidhi’s films. Star Health Insurance, owned by this man is running the state government’s group health insurance scheme. Sayed Salahuddin was also named in Justice Sarkaria Commission report in 1976. The Commission was instituted by Prime Minister Indira Gandhi, after dismissing Karunanidhi for gross corruption.

# On May 29, 2009 (48 hours after Raja sworn in again as Telecom Minister), Delhi High Court (Justice Mukul Mudgal and Justice Valmiki Mehta) on hearing the PIL against First-Come-First-Serve (FCFS) policy observed: “It is like selling cinema tickets. We find it very strange that public exchequer and valuable resources have been involved and misused in this way. We are completely astounded.”. The Delhi High Court in 1994 termed the FCFS policy as a barbarian and said not a suitable one to a democratic government]


# July 1, 2009 – Justice GS Sistani of Delhi High Court quashed the DoT’s decision to reverse the cut-off date. The case was filed by STel. On Nov 24, 2009 – Delhi HC Chief Justice upheld the Single Bench verdict and rejected the appeal of DoT. Shockingly in these two courts DoT filed an affidavit that Raja got Prime Minister’s concurrence. How Law Ministry and Attorney General GE Vahanvati vetted such an affidavit? The affidavit filed by Telecom Department (mentioned in the Para No : 5 of the verdict given by Delhi HC Chief Justice) only says Raja’s letter to PM on Nov 2, 2007 seeking his consent for reversing the cut off date (last date of application). But the Telecom Department, Minister Raja and the Attorney General Vahanvati cleverly and criminally hushed up PM’s objections and directions to Raja on the same date.

This wrong affidavit was not included in the SLP in the Supreme Court, when The Pioneer reported on misquoting PM in the Delhi High.

# DoT approaches Supreme Court through SLP to quash the HC verdicts. Janata Party President Subramanian Swamy impleads into the case. Sensing danger, Raja wanted the STel to withdraw from the case. On March 5, 2010, Friday evening after office hours, DoT issues an order asking STel to close its operation in three states, citing security reasons. There was no show cause was issued to STel and later Home Ministry revealed that they never raised any sort of security concern. Arm twisted STel surrendered before Raja on March 8, 2010 on Monday and declared that they have no troubles with DoT policy. Vahanvati produced STel’s surrender letter to Supreme Court, which was rejected and directed the company to file an affidavit. Due to Subramanian Swamy’s presence, Raja’s design failed and court said that thy will not interfere into the HC order declaring the change of cut off date as illegal.

# It must be remembered that STel offered to DoT and later to Prime Minister Rs.17,752 crore (mentioned in the Para No : 11 of the verdict of Delhi HC Chief Justice) for pan-Indian license/spectrum. But they got only three circles, due to change of cut-off date. Raja sold out Pan Indian license/spectrum for just Rs.1651 crore, the value fixed in 2001. The figure/rate quoted by STel in letters to DoT, Minister Raja and PM exposes the actual rates of 2G Spectrum in 2007-08 and huge loss to exchequer by Raja’s fraudulent action. This huge offer of STel became one of the basic factor for CAG in assessing the loss happened in 2G Spectrum allocation, including Dual Policy to Reliance and Tata

The figure Rs.17,752 crore offered by STel, mentioned the judgments is typographical error. The actual figure is Rs.13,752 according to CAG, after verifying the DoT papers.

#On October 14, 2009, Central Vigilance Commissioner Pratyush Sinha orders to CBI to probe the spectrum scam under Sec 120B of IPC (criminal conspiracy) and Sec 13d of Prevention of Corruption Act. CBI registers FIR on October 21, 2009. The FIR said the loss was Rs.23,000 crore. Later Enforcement Directorate also registers cases. Nothing happened till the Supreme Court intervened in September 2010 on the PIL filed by Prashant Bhushan, leading to the Supreme Court monitoring of the investigation. How can CBI and ED act, when Raja was kept on power till November 2010?

# By September 2010, the cases filed in Supreme Court by Subramanian Swamy and Prashant Bhushan started in the Bench of Justice GS Sighvi and AK Ganguly. Thankfully the mindset of the courts changed after SH Kapadia became the Chief Justice of India Raja finally submits resignation on November 14, 2010.

# The CAG found that out of the 122 licenses, 85 licenses are illegal according to the DoT guidelines itself, amounting to immediate cancellation at any point of time.
CAG found that the licenses given to Swan (13), Unitech(22), Loop(21), Datacom(21) STel(6) and Allianz Infra (2) are totally illegal according to DoT guidelines itself, apart from violations in Companies Act. The CAG tabled the report in Parliament on November 16, 2010 – finding a presumptive loss up to Rs.1.76 lak crore due to the illegal allotment of 2G spectrum including Dual Policy.

[Cartoon Courtesy: Times of India]