2G SCAM

The 2G spectrum scam involved officials in the government of India illegally

undercharging mobile telephony companies for frequency allocation licenses,
which they would use to create 2G subscriptions for cell phones. The shortfall
between the money collected and the money which the law mandated to be
collected is 1,76,379 crore rupees or USD 39 billion.

According to a report submitted by the Comptroller and Auditor Generalbased on money

collected from 3G licenses, the loss to the exchequer was 176,379 crore (US$38.27 billion). The
issuing of the 2G licenses occurred in 2008, but the scam came to public notice when the Indian
Income Tax Department investigated political lobbyist Niira Radia and the Supreme Court of
India took Subramaniam Swamy's complaints on record.

In 2008, the Income Tax department, after orders from the ministry of Home and the PMO, began
tapping the phones of Niira Radia. This was done to help with an ongoing investigation into a
case where it was alleged that Niira Radia had acted as a spy.
Politicians involved

Raja, the Ex-Minister of Communications and Information Technology

Subramaniam Swamy, activist lawyer and politician
Arun Shourie, the minister for Telecom during 2003 in the previous BJP regime.
Pramod Mahajan, the minister for Telecom between 1999 and 2003.

Corporations involved

Unitech Group a real estate company entering the telecom industry with its 2G bid; sold 60% of
its company stake at huge profit to Telenor after buying licensing (Including land values
properties for towers)

Swan Telecom sold 45% of its company stake at huge profit to Emirates Telecommunications
Corporation (Etisalat) after buying licensing

Loop Mobile

Videocon Telecommunications Limited

S Tel

Reliance Communications

Sistema Shyam Mobile (MTS) – Sistema Mobile Russia

Tata Communications
khimran@hotmail.com
Bankers seek RBI cover in CBI probe into 2G scam (economic times 13th jan)

Banks which keep the nation’s $1.3 trillion economy humming are seeking refuge under
the RBI to ensure an orderly investigation by the CBI into the telecom scandal, fearing
disturbances to their functioning if left to the sleuths themselves.

CBI investigators ar4e seeking details from banks on their lending to various telecom
companies some of whom have been accused of getting undue benefits from the
government’s handling of the licensing process.

Automobile-crisis, revival
GM, Chrysler, Ford, Toyota
The automotive industry crisis of 2008–2010 was a part of a global financial downturn. The
crisis affected European and Asian automobile manufacturers, but it was primarily felt in the
American automobile manufacturing industry. The downturn also affected Canada by virtue of the
Automotive Products Trade Agreement.

The automotive industry was weakened by a substantial increase in the prices of automotive
fuels linked to the 2003-2008 energy crisis which discouraged purchases of sport utility
vehicles (SUVs) and pickup trucks which have low fuel economy. The popularity and relatively
high profit margins of these vehicles had encouraged the American "Big Three"
automakers, General Motors, Ford, and Chrysler to make them their primary focus. With fewer
fuel-efficient models to offer to consumers, sales began to slide. By 2008, the situation had turned
critical as the credit crunch placed pressure on the prices of raw materials.

Major manufacturers, including the Big Three and Toyota offered substantial discounts across
their lineups. The Big Three faced criticism for their lineups, which were seen to be irresponsible
in light of rising fuel prices. North American consumers turned to higher-quality and more fuel-
efficient product of Japanese and European automakers. However, many of the vehicles
perceived to be foreign were actually "transplants," foreign cars manufactured or assembled in
the United States, at lower cost than true imports

Companies, which were there for many years like - Chrysler and General Motors, had to file for

bankruptcy due to the significant drop in car sales, Ford even had to secure a line of credit to avoid

unpleasant credit crunch in the future. During this period, auto industry experienced significant

changes, when the market share of the Big Three American auto manufacturers suffered
significantly. There were huge layoffs and salary cuts as well as discontinuation of many popular car

models.

he triumphant return of General Motors to Wall Street less than 18 months after its bankruptcy
marks a renaissance in the US auto industry , even though Detroit faces tough competition with
Asian rivals and an uncertain outlook in Europe.

GM, Ford and Chrysler were among the hardest hit by the 2008 collapse in US auto sales amid
the worst economic downturn in decades.

While Ford managed to stay afloat thanks to a massive loan it obtained shortly before the credit
crunch, GM, Chrysler and a host of suppliers were forced to seek tens of billions in emergency
aid from the US government.

Crushed under the weight of their debts and a collapse in sales, GM and Chrysler were steered
through government-financed bankruptcies in June and July of 2009.

GM emerged as an essentially nationalized company with the US government anxious to reduce

its 61 per cent stake. Chrysler emerged under the direction of Fiat -- which obtained a 20 per cent
stake in exchange for sharing its technology -- and the US government retained an eight per cent
stake.

But while sales have remained at historically low levels, they have nonetheless begun to rebound.
And radically lower cost-structures and a renewed focus on product design have allowed GM,
Ford and Chrysler to make a sharp turn back to profitability. GM posted a profit of $4.8 billion
through the first nine months of the year and is expected to end the year in the black for the first
time since 1994 after having accumulated more than 86 billion dollars in losses from 2005
through 2008.

Ford's share price is at its highest point in nine years after posting its sixth straight quarterly profit
last month and Chrysler is expected to launch an IPO late next year.

Airline-revival

With recessionary blues slowly abating, domestic airlines have been making big plans for fleet and route

expansion along with increased hiring of both pilots and cabin crew. These plans may now face uncertainty

as the 2010-11 budget proposals envisage an increase in aviation turbine fuel prices along with the
imposing service tax on all passengers. In other words, air fares are set to be hiked within the next few days.

This will, in turn, have an impact on the volume of air passengers and ultimately will affect the bottomline of

airlines.

Jet Airways (India) Ltd, the country’s largest carrier by passengers, swung to a profit in the
second quarter from a loss in the year-ago period on improved seat occupancy and greater
efficiency, underscoring the revival of the Indian aviation industry.

The airline, which has a market share of 26.9% along with its low-fare subsidiary, reported a
stand-alone net profit of Rs. 12.40 crore for the quarter ended 30 September against a net
loss of Rs. 406.69 crore in the same period last year.

This is first time Jet Airways has reported a net profit in the September quarter, traditionally a
lean one for airlines. Total income rose 32% to Rs.3,105.04 crore from Rs. 2,344.18 crore.
Despite the lean season and competitive fares offered by rivals, the company has sharply
improved its year-on-year operating profit margin, a reflection of improved network synergies,
various cost efficiencies and consistently high levels of seat occupancies over the last few
quarters, the airline said in a statement.

“This is not the story of Jet Airways, but the Indian airline industry. Jet Airways could post
better results because of robust passenger growth and airlines managing to increase seat
occupancies without adding more capacity into this market

During the reporting quarter, airline passenger growth rose 12% while airlines added 8%

capacity from the year ago.