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WHAT IS THE 2G SCAM

2G licenses issued to private telecom players at throwaway prices in 2008 CAG: Spectrum scam has cost the government Rs. 1.76 lakh crore CAG: Rules and procedures flouted while issuing licenses

RULES VIOLETED
Cut-off date for applications advanced by a week Licenses issued on a first-come-firstserved basis No proper auction process followed, no bids invited

Raja ignored advice of TRAI, Law Ministry, Finance Ministry nowhere in the guidelines or recommendations of TRAI it had mentioned that Spectrum needs to be allotted on first come first serve basis

CONTROVERSY

Unitech sold ITS SHARE to Telenor of Norway and Swantelecom sold to Etisalat of the UAE at much higher premium. This led to controversy as it was felt that the spectrum allocation had led to a huge loss to public exchequer.

The CAG has put the loss at Rs. 1.40 lakh crore on the basis of new licences of 2008 and Rs. 36,000 crore go giving licenses to existing operators for giving additional spectrum beyond contractual limit of 6.2 Mhz. 50 lakh subscribers in the year 2001 compared to 37.5 crore mobile phone users by the end of March 2008

TRAI

The Telecom Regulatory authority of India (TRAI) is a statutory body found by the government of India in 1995 to avoid excessive government interference in pricing and policy.

TRAI VIOLETED

These include mentioning of telecom business in the companys Memorandum of Association (MoA) and Articles of Association, minimum paid-up capital and not holding more than 10% shareholding in another licence holder in the same area Companies that did not meet these minimum requirements were allowed to re-submit the application after due compliance. If the telecom ministry had strictly followed the rules, these 12 companies would have been asked to resubmit their applications at a later date.

While 72 licences were given to companies which did not have the stipulated paid-up capital at the time of application, 27 licences were issued to companies who failed to satisfy conditions of main object clause in their MoA and the share holding pattern declared by one company did not meet the DoT stipulations, says the CAG report signed by director general of audit RP Singh.

RULES CHANGED

The last date to submit applications for 2G spectrum was announced as 1st October 2007 by the ministry as on 24th September. Later an artificial cut-off date, Sep 25, 2007, was created and applications received between Sep 25 and Oct 1 were summarily rejected. (This in itself is a clear violation of TRAIs guidelines).

COMPANIES LIKELY INVOLVED

Datacom Solutions, Yestel, Shyam Telelink, Loop Telecom, Spice, Idea Cellular, Tata Teleservice, Swan and Unitech

CONGRESS

Despite all misshapes the Congress party, Prime Minister and the Finance Minister are trying to hold up the Telecom Minister A. Raja due to political pressure from the DMK which is obvious. In fact Raja has said on record that whatever he has done has been discussed and in consent with the Prime Minister. This very fact is even more shocking than the scam in itself

SWAN

In its report tabled in Parliament, the CAG said the Swan Telecom's application was "in effect against the intent and spirit" of the Unified Access Service Licencing (UASL) guidelines as it was among those beneficiaries which "suppressed facts, disclosed incomplete information and submitted fictitious documents" to the Department of Telecom

SWAN AND RELIANCE

The audit by CAG found that the e-mail ID of the corporate as well as registered office of Swan Telecom Pvt Ltd in its application dated March 2, 2007 was shown as hari.nair@relianceada.com, the report said, adding the same email ID was also given for the correspondence address and the authorised contact person of the applicant company.

Tigers Traders Private Limited held the shares of Swan (then Swan Capital Private Limited) as trustees of Indian Telecom Infrastructure Fund the total equity/stakes of Reliance Telecom Ltd (RTL) in Swan Telecom was of Rs 1002.79 crore against equity holding of Rs 98.22 crore by the majority share-holder Tigers Traders Pvt Ltd Since Reliance Telecom Ltd was operating in all the service areas for which Swan Telecom Ltd had applied for UASL, the application of Swan Telecom Pvt Ltd was not in conformity with the UASL guidelines and hence was not eligible to be considered

UNITECH
Unitech. They were in deep financial crisis with the sinking of Lehman Brothers, and the sudden collapse of the financial markets. Suddenly, they were faced with large projects which they were undertaking and no money to execute them it made a windfall profit of 3 times that amount, plus it still retained about one third of the shares it could unload later in the market. All in all, a neat hefty gain of about Rs. 1012, 000 crore in six months on an investment of Rs. 1,651 crore None of the Unitech companies met the license conditions In spite of patent illegalities in the award of licenses to companies who have lied and submitted false papers, why is the UPA and the Congress still sticking to these companies?

BANKS

5 of the companies all of them held to be ineligible by CAG got a total of Rs. 26,000 crore from public sector banks as loans. The list includes Swan Telecom, Unitech, Loop, Datacom (Videocon) and STel.

INVESTIGATION COMMITTEE

The one-man committee of retired Supreme Court Justice Shivraj V Patil, will examine appropriateness of procedures (adopted) by DoT in the issuances of licences and allocation of spectrum during the period 2001-2009. The Congress top brass, including Sonia Gandhi, Prime Minister Manmohan Singh, Pranab Mukherjee, and Ahmed Patel met on November 16 in the office of the Congress President at the Parliament Annexe, sources said. It was decided in this meeting that the government will stick to its stand of referring the issue of 2G Spectrum Scam to the Public Accounts Committee (PAC). The committee is being led by senior BJP leader Murli Manohar Joshi. BJPs strategists believe that if a JPC probe is ordered then they can use the issue for a longer period of time (Assembly Polls in certain states next year and General Elections in 2014). Also, the members of the JPC can keep on widening the scope of the inquiry, and can even summon the Prime Minister to appear before it.

FAILLURE OF PENALTY

Unitech brand name Uninor, Swan name changed to Etisalat, Allianz since merged with Etisalat, Shipping Stop Dot Com name changed to Loop Telecom, Datacom name changed to Videocon and S Tel were required to roll out the services in the 90 % service area in metros and 10% district headquarters (DHQ) in other service areas within 12 months of the date of award of licences.

The audit found that though these six new operators obtained the initial 4.4 Mhz spectrum in 81 service areas during the period April 2008 to January 2009, none of them had rolled out their services as per the provisions of the UAS licences in any service area till 31 December 2009. Further, DoT also failed to recover damages and penalty of Rs 679 crore from these operators for inordinate delay in rolling out their services till 31 December 2009.

TATA
Continuing his war of words with Ratan Tata, Rajya Sabha MP Rajeev Chandrasekhar on Thursday alleged that contrary to claims of probity, the Tata Group got spectrum allocated out of turn through change in policy to allow dual technology. Chandrasekhar said companies which got both CDMA as well GSM spectrum (Tata Teleservices and RCom) at 2001 price serve the least number of subscribers and also paid the minimum revenue to the government per MHz of spectrum (compared to old operators). Tata had said old GSM operators were holding excess spectrum and that too free of cost. how did the Tata companies get UASL licences in new circles without going through the auction process

DMK
Karunanidhi pulled out all the stops, including playing the 'Dalit card', to save his 'affectionate brother' and let him continue as telecom minister, but in vain as Raja was forced to quit after Opposition parties stalled proceedings in Parliament demanding his resignation. how a tainted minister was allowed to continue for three years after the reports of the scam came in 2007 and why action was not taken against him