New Delhi: For sheer pedigree, it's hard to top the telecom scam. It's estimated to be India's most expensive swindle, and the principal characters include A-listers from the political and corporate world. That combo has resulted in a political morass that seems to deepen every day, as new details of the case emerge.
The accused involve 14 people, arrested for their alleged involvement in the 2G telecom scam, so named because of the type of spectrum involved. They include former minister A Raja; bureaucrats who worked closely with him - RK Chandolia and Siddharth Behura; Rajya Sabha MP Kanimozhi; and executives like Sanjay Chandra of Unitech Wireless and Gautam Doshi who was the Managing Director of Reliance-Anil Ambani Dhirubhai Group (ADAG) when he was arrested. The court will also decide on framing of charges against three companies named in the chargesheet - Unitech Wireless, Reliance Telecom and Swan Telecom.
Mr Raja has been in jail since February. Telecom executives like Mr Chandra were imprisoned in April. Ms Kanimozhi, whose father M Karunanidhi is the powerful chief of the DMK, was arrested in May. All 14 people arrested have said they are innocent.
The CBI has accused all of them of criminal conspiracy. Mr Raja, described by investigators as the mastermind, has been accused of misusing his public office and faces criminal charges under the Prevention of Corruption Act. Ms Kanimozhi allegedly helped Mr Raja accept a Rs. 214-crore kickback from a grateful company which got an out-of-turn license from him.
A few weeks ago, the CBI introduced new charges which come with a maximum sentence of life imprisonment - criminal breach of trust by a public servant for Mr Raja and the bureaucrats; abetment to criminal breach of trust by a public servant for the 11 others.
The telecom scam, according to the CBI, was crafted in 2008 - when Mr Raja was Telecom Minister. He ignored advice, including from the Prime Minister, to auction second-generation or 2G spectrum. Instead, he allotted licenses on a first-come-first-serve basis that was twisted to help companies he allegedly conspired with. The spectrum was thrown in for free.
Mr Raja set a deadline for filing applications in September 2008; in January 2010, he made a last-minute announcement that licenses would be given to those who filed their "Letters of Intent" first. The deadline for filing these documents and cheques was within hours of Mr Raja's revision of rules. A few companies were ready with their cheques - the CBI believes they had been tipped off by the minister. And amid a fair amount of chaos, 122 licenses were issued to nine companies at a cost of Rs. 1600 crores each.
One of them - Swan Telecom - allegedly repaid Mr Raja with a 214-crore cheque routed through a maze of companies to Kalaignar TV, a local channel in Chennai. Kanimozhi and her stepmother own 80 per cent of the channel. Kanimozhi's lawyers have said the money was a loan which was returned with interest, and that she was not involved with the daily management of the company. The CBI has contested this, describing her as "the active brain" behind Kalaignar.
Mr Raja has in his defense said that the Prime Minister, and P Chidambaram who was Finance Minister at the time, were kept informed of his plan of action. If they disagreed with his guidelines, he has challenged, they could have over-ruled him. That is an argument that the Opposition is fond of making. And a document from the Finance Ministry, prepared this year, agreed in part - it said Mr Chidambaram could have enforced an auction of spectrum.
The excavation of that document by a Right to Information activist caused a seizure for the government, with the Opposition demanding the resignation of Mr Chidambaram, who is now Home Minister. A week after the document was presented in the Supreme Court, Finance Minister Pranab Mukherjee clarified it was prepared with inputs from different ministries, and that he did not agree with all of its inferences. But the damage was done. The Supreme Court has been asked to order the CBI to investigate Mr Chidambaram's role. Though the CBI has said this is not needed, the court has yet to take a final call.
Today, though, the spotlight is on a different court - Judge Saini's special 2G court was set up in February upon the Supreme Court's orders to hear the case on a daily basis. The appearance of Mr Raja, Kanimozhi and the others in court has meant that there has been no waning of public and political interest or attention since November, when the government's auditor declared the scam had cost India Rs. 1.76 lakh crores, forcing a reluctant Mr Raja to resign as Telecom Minister. The CBI has said it believes the losses are in the range of Rs. 30,000 crores.
The government's regulator for telecom policy - TRAI - has said it does not believe there were any losses since it does not believe spectrum should have been auctioned.
The CBI's accusations have been contested at times by the government. For example, the three Reliance executives in jail allegedly set up Swan Telecom as a front for their company to collect more spectrum and licenses than were legally permissible. But the Law Ministry has said that after examining the details, Swan cannot technically be considered "an associate" of Reliance. The CBI alleges both Swan and Unitech Wireless made huge profits by buying their 2G licenses cheaply and then selling stake to foreign partners at huge profits.
Telecom Minister Kapil Sibal has said that the transactions were legal because "what occurred was dilution of equity and not the sale of equity."
The accused involve 14 people, arrested for their alleged involvement in the 2G telecom scam, so named because of the type of spectrum involved. They include former minister A Raja; bureaucrats who worked closely with him - RK Chandolia and Siddharth Behura; Rajya Sabha MP Kanimozhi; and executives like Sanjay Chandra of Unitech Wireless and Gautam Doshi who was the Managing Director of Reliance-Anil Ambani Dhirubhai Group (ADAG) when he was arrested. The court will also decide on framing of charges against three companies named in the chargesheet - Unitech Wireless, Reliance Telecom and Swan Telecom.
Mr Raja has been in jail since February. Telecom executives like Mr Chandra were imprisoned in April. Ms Kanimozhi, whose father M Karunanidhi is the powerful chief of the DMK, was arrested in May. All 14 people arrested have said they are innocent.
The CBI has accused all of them of criminal conspiracy. Mr Raja, described by investigators as the mastermind, has been accused of misusing his public office and faces criminal charges under the Prevention of Corruption Act. Ms Kanimozhi allegedly helped Mr Raja accept a Rs. 214-crore kickback from a grateful company which got an out-of-turn license from him.
A few weeks ago, the CBI introduced new charges which come with a maximum sentence of life imprisonment - criminal breach of trust by a public servant for Mr Raja and the bureaucrats; abetment to criminal breach of trust by a public servant for the 11 others.
The telecom scam, according to the CBI, was crafted in 2008 - when Mr Raja was Telecom Minister. He ignored advice, including from the Prime Minister, to auction second-generation or 2G spectrum. Instead, he allotted licenses on a first-come-first-serve basis that was twisted to help companies he allegedly conspired with. The spectrum was thrown in for free.
Mr Raja set a deadline for filing applications in September 2008; in January 2010, he made a last-minute announcement that licenses would be given to those who filed their "Letters of Intent" first. The deadline for filing these documents and cheques was within hours of Mr Raja's revision of rules. A few companies were ready with their cheques - the CBI believes they had been tipped off by the minister. And amid a fair amount of chaos, 122 licenses were issued to nine companies at a cost of Rs. 1600 crores each.
One of them - Swan Telecom - allegedly repaid Mr Raja with a 214-crore cheque routed through a maze of companies to Kalaignar TV, a local channel in Chennai. Kanimozhi and her stepmother own 80 per cent of the channel. Kanimozhi's lawyers have said the money was a loan which was returned with interest, and that she was not involved with the daily management of the company. The CBI has contested this, describing her as "the active brain" behind Kalaignar.
Mr Raja has in his defense said that the Prime Minister, and P Chidambaram who was Finance Minister at the time, were kept informed of his plan of action. If they disagreed with his guidelines, he has challenged, they could have over-ruled him. That is an argument that the Opposition is fond of making. And a document from the Finance Ministry, prepared this year, agreed in part - it said Mr Chidambaram could have enforced an auction of spectrum.
The excavation of that document by a Right to Information activist caused a seizure for the government, with the Opposition demanding the resignation of Mr Chidambaram, who is now Home Minister. A week after the document was presented in the Supreme Court, Finance Minister Pranab Mukherjee clarified it was prepared with inputs from different ministries, and that he did not agree with all of its inferences. But the damage was done. The Supreme Court has been asked to order the CBI to investigate Mr Chidambaram's role. Though the CBI has said this is not needed, the court has yet to take a final call.
Today, though, the spotlight is on a different court - Judge Saini's special 2G court was set up in February upon the Supreme Court's orders to hear the case on a daily basis. The appearance of Mr Raja, Kanimozhi and the others in court has meant that there has been no waning of public and political interest or attention since November, when the government's auditor declared the scam had cost India Rs. 1.76 lakh crores, forcing a reluctant Mr Raja to resign as Telecom Minister. The CBI has said it believes the losses are in the range of Rs. 30,000 crores.
The government's regulator for telecom policy - TRAI - has said it does not believe there were any losses since it does not believe spectrum should have been auctioned.
The CBI's accusations have been contested at times by the government. For example, the three Reliance executives in jail allegedly set up Swan Telecom as a front for their company to collect more spectrum and licenses than were legally permissible. But the Law Ministry has said that after examining the details, Swan cannot technically be considered "an associate" of Reliance. The CBI alleges both Swan and Unitech Wireless made huge profits by buying their 2G licenses cheaply and then selling stake to foreign partners at huge profits.
Telecom Minister Kapil Sibal has said that the transactions were legal because "what occurred was dilution of equity and not the sale of equity."
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