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2. Group Members :- Slides
Explained
Bikash (leader) 1-4
Bhuvnesh Kothar 5-7
Chirag Garg 8 - 10
Pankaj Yadav 11 - 12
Akshay Shukla 13 - 16
Nitesh Kr. Rai 17 - 20
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3. What is 2G
•2G (or 2-G) is short for second-generation wireless telephone technology.
Second generation 2G cellular telecom networks were commercially launched on
the GSM standard in Finland by Radiolinja (now part of Elisa Oyj) in 1991.
•Three primary benefits of 2G networks over their predecessors were that
1. phone conversations were digitally encrypted;
2. 2G systems were significantly more efficient on the spectrum allowing for far
greater mobile phone penetration levels; and
3. 2G introduced data services for mobile, starting with SMS text messages.
•After 2G was launched, the previous mobile telephone systems were retrospectively
dubbed 1G. While radio signals on 1G networks are analog, radio signals on 2G
networks are digital.
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4. What is 2-G Scam?
 The 2G spectrum scam involved officials and ministers 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.
 According to a report submitted by the Comptroller and Auditor General based on
money collected from 3G licenses, the loss to the exchequer was 176,645 crore
(US$35.24 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.
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5. Parties Accused Of Involvement
Politicians Involved :
1. A. Raja
Allegation - In a joint investigation report prepared by Central Bureau of
Investigation (CBI) and Income Tax Department the agencies allege that A.Raja
could have received 3,000 crore (US$598.5 million) as bribe for bringing forward
the cut-off date for applications for spectrum from the initial 1 October 2007 to 25
September 2007.
Charges - Criminal breach of trust by a public servant under section 409, criminal
conspiracy under section 120-B, cheating under section 420 & forgery under
sections 468 and 471. Booked under the Prevention of Corruption Act for accepting
illegal gratification.
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6. 2. M. K. Kanimozhi :
Allegation -
•As per the chargesheet filed by CBI Kanimozhi has 20% stake in her family
owned Kalaignar TV, her step-mother Dayalu Ammal owns 60% stake in the same
channel.
•CBI alleges that Kanimozhi was an "active brain" behind the channel's
operations and she worked along with former telecom minister A. Raja to get DB
Realty promoter Shahid Balwa to circuitously route 200 crore (US$39.9
million) to Kalaignar TV.
•According to CBI, Kanimozhi was in regular touch with A Raja regarding launching
of Kalaignar TV channel and its other pending works.
Charges - Criminal conspiracy to cause criminal breach of trust by a public
servant, criminal conspiracy under section 120-B, cheating under section 420 &
forgery under sections 468 and 471. Booked under the Prevention of Corruption Act.
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7. There were also many corporate executive involved like
1. Sanjay Chandra (former MD, Unitech Wireless)
2. Gautam Doshi (group MD, Relaince Anil Dhirubhai Ambani Group)
3. Hari Nair (Senior Vice- President, Reliance Anil Dhirubhai Ambani Group)
4. Vinod Goenka (promoter and MD, DB Realty & Swan Telecom)
5. Sharath Kumar (MD, Kalaingnar TV)
and many more were involved.
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8. 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:
It sold 45% of its company stake at huge profit to Emirates
Telecommunications Corporation (Etisalat) after buying licensing.
Videocon Telecommunications Limited
Reliance Communications
Sistema Shyam Mobile (MTS) – Sistema Mobile Russia
Tata Communications
Vodafone Essar
Loop Mobile
S Tel
Dishnet Wireless
Allianz Infra
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9. Media persons and Lobbyists involved
Nira Radia, a former airline entrepreneur turned corporate lobbyist whose
conversations with politicians and corporate entities were recorded by the
government authorities and leaked creating the “Nira Radia tapes
controversy”
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10. Barkha Dutt, an NDTV journalist alleged to have
lobbied for A.Raja's appointment as minister.
Vir Sanghvi, a Hindustan Times editor alleged
to have edited articles to reduce blame in the
Nira Radia Tapes.
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11. WHAT ARE THE CHARGES ON FORMER TELECOM
MINISTER A RAJA?
CHEAP TELECOM LICENSES
Entry fee for spectrum licenses in 2008 pegged at 2001 prices Mobile
subscriber base had shot up to 350 million in 2008 from 4million in 2001.
NO PROCEDURES FOLLOWED
• Rules changed after the game had begun.
• Cut-off date for applications advanced by a week.
• Licenses issued on a first-come-first-served basis.
• No proper auction process followed.
• Raja ignored advice of TRAI, Law Ministry, Finance Ministry.
• TRAI had recommended auctioning of spectrum at market rates
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12. Impact on stock markets
• The first casualty in Stock Markets once Raja was arrested was DB
Realty.
• DB Realty had given 200+ crores to Kalaignar TV (owned
by Karunanidhi's Wife) .
• The news led to 20% fall in the stock prices of DB Realty.
• Sun TV had its shares fall by 10% on the next day following
rumours of Kalanidhi Maran having stake in Kalaignar TV.
• Sun TV COO refused the allegations. Swan Telecom Chief Balwa
was arrested on Feb 8 and this led to rumours of links with Anil
Ambani's Reliance ADAG and it led to 20% fall of his stocks. Its
reported that nearly 2 Billion USD was eroded from his stocks
.Spicejet stocks went down after reports of investigation on Maran's
recent takeover of Spicejet.
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13. Shortfall of money
A. Raja arranged the sale of the 2G spectrum licenses below their
market value. Swan Telecom, a new company with few assets,
bought a license for 1,537 crore (US$333.53 million). Shortly
thereafter, the board sold 45% of the company to Etisalat for 4,200
crore (US$911.4 million).
Similarly, a company formerly invested in real estate and not
telecom, the Unitech Group, purchased a license for 1,661 crore
(US$360.44 million) and the company board soon after sold a 60%
stake in their wireless division for 6,200 crore (US$1.35 billion) to
Telenor.
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14. Supreme Court Judgement
On 2 February 2012 Supreme Court of India delivered judgement on
petitions filed by Subramanian Swamy and Centre for Public Interest
Litigation (CPIL) which had challenged allotment of 2G licenses granted in
2008.
The Supreme Court said in its order that then telecom minister A. Raja “
wanted to favour some companies at the cost of the public exchequer" and
listed seven steps he took to ensure this happened. According to the Supreme
Court of India the seven steps were :
1. After taking over as telecom minister, Raja directed that all applications
received for UAS licences should be kept pending till receipt of the Trai's
recommendations.
2. The recommendations made by Trai on 28 August 2007, were not placed
before the full Telecom Commission which would have included the
finance secretary.
3. The DoT officers who attended the Telecom Commission meeting held
on 10 October 2007, had no choice but to approve Trai's
recommendations, since they would otherwise have "incurred" Raja's
"wrath".
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15. 4. Since Cabinet had approved recommendations made by the Group of
Ministers, the DoT had to discuss the issue of spectrum pricing with the
finance ministry.
5. Raja brushed aside the law minister's suggestion that the matter should be
placed before the empowered group of ministers. This arbitrary action of Raja
"though appears to be innocuous was actually intended to benefit some of the
real estate firms who did not have any experience in dealing with telecom
services and who had made applications only on 24 September 2007, i.e. one
day before the cut-off date fixed by the C&IT minister on his own".
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16. 6. The cut-off date of 25 September 2007, decided by Raja on 2 November 2007,
was not made public till 10 January 2008, and the first-come-first-served
principle followed since 2003 was changed by him at the last moment through
a press release dated 10 January 2008. "This enabled some of the applicants,
who had access either to the minister or DoT officers, get bank drafts prepared
towards performance guarantee of about Rs 1,600 crore".
7. "The manner in which the exercise for grant of LoIs to the applicants was
conducted on 10 January 2008 leaves no room for doubt that everything was
stage managed to favour those who were able to know in advance change in
the implementation of the first-come-first-served policy." As a result, some
firms which had submitted applications in 2004 or 2006 were pushed down in
the priority and those who had applied between August and September 2007
succeeded.
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17. Response to scam
 In early November 2010 Jayalalithaa accused the Tamil Nadu state
chief minister M Karunanidhi of protecting A.Raja from corruption
charges and called for A. Raja's resignation. By mid November
A.Raja resigned.
 In mid November the comptroller Vinod Rai issued show-cause
notices to Unitech, S Tel, Loop Mobile, Datacom (Videocon), and
Etisalat to respond to his assertion that all of the 85 licenses granted
to these companies did not have the up-front capital required at the
time of the application and were in other ways illegal.
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18. In response to the various allegations , the Govt. of India
has replaced the then incumbent Telecom minister ,A Raja
with Kapil Sibal who has taken up this charge in addition
to being the Union minister for Human Resources
Development. Mr. Sibal contends that the "notional" losses
quoted are a result of erroneous calculations and insists
that the actual losses are nil.
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19. Corrupted Administration Of India
If we talk about the Administration of India we all must say it is not a
well maintained or a well centralized Administration as comparison to
other Asian countries.
Poor Administration of India is just because of the poor political leaders of
our country. They used to do some unofficial work for the sake of
money, this makes Administration of India weaker. This is not the only
example which makes Administration of India affected badly there are lots
of other factors which makes it worse.
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20. Thank you
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