Tag: andimuthu raja

Indian minister arrested over spectrum scandal

Former Indian telecoms minister Andimuthu Raja has been arrested in the ongoing drama over the controversial sale of telephone spectrum during 2008.

India’s top federal invesitigative agency finally landed Raja and two of his aides in what government opposition see as an overdue move.

At the end of last year TechEye reported that Raja had been rather undecided about whether he would need to stand trial, so we can only imagine that he is relieved that this has now firmly been decided for him.

The Central Bureau of Investigation (CBI) confirmed that the arrests of Mr. Raja, R.K. Chandolia, Mr. Raja’s former personal secretary, and former telecom secretary Siddartha Behura were due to facts that have been disclosed during an investigation into the allocation of licenses and bandwidth to certain companies ahead of others.

It is alleged that due to the trio’s meddling, the country lost out on an estimated $39 billion in potential revenues because of spectrum being massively undersold.  

Raja served between May 2007 and his resignation on November 14 2010, since when he has protested his innocence along with his aides, according to the WSJ.

It is now thought that the three men will appear in court today, with prosecutors seeking custody in lieu of further investigations.

While it might seem that the arrest of Raja and his cronies might signal a positive move in a country plagued by such corruption scandals, it is worth noting that another former telecoms minister, Sukh Ram, is still awaiting conviction in a corruption case from way back in 1996.

However, it is hoped that the arrests will allow Parliament to return to normal after opposition parties led by the BJP obstructed all of the winter parliamentary session because of the scandal, after demands for a probe by a joint parliamentary panel were rejected.

While a BJP spokesperson, Prakash Javadekar, claimed that the arrest was “too little, too late”, former newspaper editor and political commentator Prem Shankar Jha, said that he believes the fact that an arrest has been made is symbolic of a change in attitude in a government where the harshest penalty for such corruption is for a minister to loss their job.

“It’s a huge breakthrough,” Jha said. “It shows this government is now serious about tackling corruption.”

India will not revoke 2G licences

A senior government official has declared that India is unlikely to cancel any of the 2G telecoms licenses that it controversially awarded in 2008, amid opposition demands for a parliamentary probe.

The Indian parliament has been effectively crippled since the news that telecommunications minister Andimuthu Raja resigned on Tuesday over the underselling scandal which caused a potential revenue loss of $39 billion.

“There is no solution by cancelling licences,” the official told reporters, adding that while the government may impose penalties to firms if a loss in revenue is found, the industry is important and can’t be “destroyed”.

India is home to the fastest growing telecom sector in the world, with over 15 million wireless subscribers a month, and is the second largest market after China for wireless services.

A report by the Comptroller and Auditor General (CAG) of India found that 13 companies which received 122 licenses for 2G bandwidth had flouted “every canon of financial propriety, rules and procedures”.

It had been suggested by analysts and investors that the CAG report could lead to licences being revoked, though this now appears unlikely according to The Wall Street Journal.

On Thursday it was proposed by the Telecom Regulatory Authority of India that 62 of the licences belonging to five of the new telecom operators should be terminated.

It is noted that new companies that were awarded licences in 2008 before starting operations in 2009 had lowered prices to less than a cent a minute to garner subscribers, while incumbents followed to retain users.

Opposition members of various parties were said to have shouted slogans in parliament demanding a joint parliamentary committee into the debacle.  There was a demand for clarification from Prime Minister Manmohan Singh on the issue, who has thus far been muted on his role in the scandal.  According to Sify, the uproar caused has led to parliament being adjourned for the sixth day running.

It had been said by the Supreme Court this week that it was worried by “the silence and alleged inaction” of the PM when an inquest had been put to him to sanction the prosecution or former Minster Raja.

Indian minister resigns over $38.9 billion 2G spectrum undersell

Indian telecommunications minister Andimuthu Raja has resigned over allegations that he willingly undersold 2G bandwidth at a loss to the Indian government of $38.9 billion.

The Comptroller and Auditor General (CAG) of India presented a 76 page report to the Indian parliament yesterday claiming that the allocation of 2G radio bandwidth had flouted “every canon of financial proprietary, rules and procedures.”

Many of the companies to which bandwidth was allocated by the Department of Telecommunications (DoT) appear to have been totally ineligible to apply, yet were still awarded licences.

“As many as 85 licences out of the 122 new licences issued to 13 companies in 2008 were granted to those companies which did not satisfy the eligibility conditions prescribed by the DoT. All 85 licences were given to companies which did not have the stipulated paid-up capital at the time of application,” the CAG report said.

Of the 13 companies to which licences were granted, it is noted that 12 would never have been granted any at all under the DoT’s own rules dating from 2005, according to the Times of India

This eligibility for Unified Access Services licences included minimum paid-up capital and not holding more than 10 percent shareholding in another licence holder in the same area.

“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 Memorandum of Association 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 R P Singh.

According to The Wall Street Journal the report said that these companies “suppressed facts, disclosed incomplete information and submitted fictitious documents”. It was also noted in the report that the 2G allocation process lacked transparency and was undertaken in an arbitrary, unfair and inequitable manner, with some recipients picking up spectrum at “unbelievably low prices”, before large stakes were sold to foreign companies.

Further outrage has surrounded the decision to bring forward the cut off point for application to September 25 2007 to October 1, meaning that certain companies’ applications were favoured according to the report.

India’s telecoms industry has exploded in the last decade, with mobile phone service subscribers rocketing from four million in 2001 to 300 million in 2008, making the country the second largest market for wireless services in the world, behind China with 670 million users.

However the presentation of the report to the Indian parliament containing accusations of $39 billion of undersold spectrum marks an uneasy period for the telecommunications industry.

There was also uproar in September over the mishandling of 3G spectrum, which led to India’s 3G infrastructure market value shrinking by a third.