The 2G (second generation) telecom spectrum allocation controversy of 2008, which the

opposition had referred to as a Rs60,000-crore scam, has returned to haunt communications

minister A Raja.

Parliament proceedings were disrupted once again on Wednesday over a newspaper report based
on records of phone conversations between corporate lobbyist Nira Radia and several high-
profile people, including Raja.

According to the report, the phone records indicated that corporate groups had a role in
influencing Raja’s decision in the alleged 2G spectrum scam. Raja could not be contacted for
comment.

The communications minister has been under attack from opposition parties ever since 2G
licences were given to a string of companies — many without any experience in the telecom
sector — at a throwaway price.

The allegation is that the government gave away scarce spectrum to companies, clubbed with
licences, on a first-come-first-serve basis, rather than through an auction process. That is, an
operator got start-up spectrum by paying pan-India licence fee of Rs1,650 crore. Also, many new
players roped in foreign investors soon after acquiring the licences, thereby making a neat sum.

Raja has so far maintained that the government has continued with the prevalent practice of
allocating 2G startup spectrum along with licences on a first-come-first-serve basis. But, the 2G
spectrum allocation issue came under the scrutiny of various bodies, including the Central
Vigilance Commission (CVC) and the Central Bureau of Investigation (CBI). Despite these
investigations during the UPA-1 regime, Raja returned as the IT and communications minister in
UPA-2. Raja is an MP of UPA ally DMK.

The government policy to allocate 2G spectrum on a first-come-first-serve basis is again being

criticised as the ongoing auction of 3G (third generation) spectrum has resulted in exceedingly
high bids. Against the pan-India reserve price of Rs3,500 crore, the 3G auction has yielded close
to Rs9,000 crore in 16 days of bidding. The 3G bidding is nowhere near the closing line yet.

Rubbishing the comparison of price of 3G spectrum with that of 2G, Raja had on Tuesday told
the media that rice under PDS (public distribution system) should not be compared with basmati.
According to Raja, 2G is for the masses and 3G for those who can afford to pay much more.

Reacting to the report, AIADMK chief J Jayalalithaa demanded the dismissal of Raja over the
spectrum scam. Jayalalitha said that CBI official Vineet Agarwal, who had investigated the case
and was transferred later, should be brought back to continue the investigation. The CBI inquiry
into the spectrum scam was necessitated following a serious indictment by the CVC, the
AIADMK chief pointed out.

Meanwhile, the Central Board of Direct Taxes (CBDT) has clarified that the income tax
department has not recorded any telephone conversation of influential businessmen, politicians
and advertising professionals, as alleged in the newspaper report. The CBDT statement has
added that “the income tax department does not intercept telephonic conversations except as
authorised under the law. The provision is used in exceptional cases of suspected tax fraud /
evasion involving security of the state. The procedure, as prescribed under the law, is strictly
followed in all such cases.”

63 people under scanner in 2G spectrum case, CBI tells SC

NEW DELHI: Sixty-three persons, including promoters and CEOs of 10 telecom firms have
come under its scanner in the 2G spectrum case, the CBI on Tuesday told the Supreme Court
which expressed satisfaction over the ongoing probe.

The central government, which is also party to the case, informed a bench of justices G S
Singhvi and A K Ganguly that it is in favour of setting up a special court to try the accused in the
2G case and the law minister has written a letter to the Delhi high court chief justice asking him
to constitute a court and identify a judge for this purpose.

“The matter is under consideration,” additional solicitor general Indira Jaisingh told the bench,
which wanted to know about the progress of investigation into the case.

Senior advocate K K Venugopal, representing the CBI, apprised the bench about the progress by
the CBI and placed the probe status report in a sealed cover.

“63 persons including promoters and CEOs of 10 companies have come under the scanner of the
CBI in its probe into the 2G spectrum scam,” Venugopal said.

The bench asked the CBI and the Enforcement Directorate to place before it their reports about
the investigation by March 10 and posted the matter for further hearing on March 15.

Senior advocate Harish Salve, appearing for Tata group of companies, meanwhile, pleaded for
in-camera proceedings.

Earlier on February 10, while hearing a plea by Centre for public interest litigation for probe into
the 2G case, the Supreme Court had asked the CBI to widen its probe ambit and include into it
high flying corporate honchos without getting influenced by their status.

While giving the CBI a free hand to probe the case, the court had also asked the government to
set up a special court to exclusively try the spectrum scam case accused.

“We have a large number of persons who think themselves to be the law. Law must catch them.
It should be done with greater expedition. Merely that they are on the Forbes list or they are
millionaires does not make any difference,” the bench had remarked after perusing the CBI’s
probe status report in which names of big corporate houses and their officials had been
mentioned.

But counsel Prashant Bhushan appearing for petitioner CPIL had pointed out to the court that the
agencies have not questioned the heads of several companies including those of Swan
Technology, which was controlled by Anil Ambani’s Reliance Group, when the spectrum was
allocated.

At this, the bench said, “Top authorities of companies were not questioned. It is surprising that
the managing directors were not summoned”.

Seeking to widen the CBI’s probe ambit, the apex court had said the agency’s freedom to
investigate the matter should not be curtailed in any way and asked the agency to go beyond the
role of the four persons, including former Telecom Minister A Raja, already arrested in the case.

“This investigation has led to prima-facie conclusion about the culpability of four persons. What
about the beneficiaries. They are part of a larger conspiracy. We want to know about them. You
(CBI) take instructions and tell us what action you are planning to take,” the bench had told the
CBI.

New Delhi: Pressure is buildings up on the Congress-led United Progressive Alliance Government
to get rid of Union Telecom Minister A Raja for his alleged link to the 2G spectrum scandal.
The final Comptroller and Auditor General (CAG) report which CNN-IBN has accessed also shows
how some companies which failed to meet the eligibility criteria were favoured by the Telecom
Ministry.
The report clearly says that many of the companies were privy to insider information and were given
undue favours to win the licences.
Out of the 122 new licenses that were given out, 85 licenses were won by companies that did not
meet the eligibility criteria. Six of the Unitech group companies which applied for licenses for 20
circles did not meet requirements.

Such was the hurry to get into telecom that they altered memorandums of association with
government clearance and should have been rejected. But in Raja's tenure they ended up winning
several circles.

According to the CAG 12 companies lied about their paid up capital. Bidders must have a
minimum of Rs 3-10 crore as paid up equity capital but most of the companies who won the
licenses did not meet the mark.

As per the laws a company cannot have stakes in more than one licensee company for the same
area.

This rule was ignored for Swan Telecom, where Reliance held over 10 per cent equity stake at
the time of the license application.
The CAG report says Department of Telecom also gave undue benefit to Reliance
Communications for introducing GSM in 20 circles almost immediately while others has to wait
for a year longer.

The fact that many of the original bid winners sold stakes at a huge premium to others shows that
there was money to be made.

Now that the CAG has certified the allegations, the heat will be on the companies as well.

Mumbai: After its promoter Shahid Balwa was arrested in connection with the 2G spectrum
scam, another scandal has hit telecom and real estate company DB Realty. According to
documents available with an RTI activist, Dynamix, a subsidiary of DB Realty paid Rs. 4 crore
to Mumbai Regional Congress Committee chief Kripashankar Singh's son, Narendramohan
Singh.

The money was paid to Narendramohan and his wife Ankita in 2008 and 2009 through the
Samata Sahakari Bank. The company paid these in three installments in 2009.

The petitioner, who procured the documents had submitted them as part of a PIL filed earlier this
year which accuses Singh of having disproportionate assets.

"I did not link it to the 2G scam. I want a proper enquiry to be done. Where has this money come
from? The facts must come out," said Sanjay Tiwari, Petitioner.

Kripashankar Singh and his son refused to speak on camera but accepted that they did receive the
money. They say these were pure business transactions and the money was duly returned.

In his statement Narendramohan singh says: "All money received is reflected in the books of
accounts and I-T returns. Attempts to exploit this pure business transaction for making malicious
allegations and connecting with 2G scam will be dealt with due legal action."

Dynamix realty too says the money given was a loan which was later returned. "Dynamix Realty
had given a loan to Mr. Narendra Mohan Singh which has been repaid to the company on 12th
March 2010."

The Bombay High Court had asked for the Enforcement Directorate, the Income Tax department
and Anti-Corruption Bureau to conduct an inquiry against Kripashankar Singh and submit a
report on Singh's assets by March 31. Now the question is how the probe agencies will view the
Dynamix money trail.