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Spectrum Allocation Under NDA: Airtel, Voda Charged

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The Central Bureau of Investigation named the country’s top two telecom service providers Bharti Airtel and Vodafone India along with former telecom secretary Shyamal Ghosh in the latest charges filed by it in connection with notorious 2G scam on 21 December. The charges include alleged irregularities in spectrum allocation dating back to 2002, under the NDA regime. The losses have been pegged at Rs 846 crore.
Shares in Bharti Airtel, India's top mobile phone carrier, extended losses after the charges were filed. A Bharti spokesman said he had no immediate comment, while a Vodafone India spokesman declined to comment. The companies have previously denied any wrongdoing.

The charges include criminal conspiracy, said A.K. Singh, a lawyer for the CBI, addressing the media. He said no executives of the companies were charged.

The CBI in its charge sheet filed before Special CBI Judge O P Saini named as accused Bharti Airtel Ltd, Vodafone India Ltd and Hutchison Max and Sterling Cellular, retired IAS and former Telecom Secretary Shyamal Ghosh for alleged irregularities in grant of additional spectrum.

J R Gupta, former Deputy Director General (VAS) cell of DoT and former Director of BSNL, who was named in the FIR as one of the accused, has been made as one of the 73 witnesses in the case, the CBI told the court.

The agency said no action has been taken against former telecom minister Pramod Mahajan and no charges have been found against the promoters of Airtel and Vodafone.

The court has fixed January 14 for consideration of the charge sheet.

This is the first time CBI is filing charges related to wrongdoing under the National Democratic Alliance (NDA) government led by the Bharatiya Janata Party (BJP). The investigation, originally confined to the 2008 allocation, was subsequently widened to cover such exercises since 2002 at the order of the Supreme Court, thus bringing actions by the current opposition under the scanner. The BJP and other opposition parties have targeted the Congress-led government over a series of corruption allegations during its administration.

Read Also: SC Brings 2G Scandal To NDA Door

The investigation follows the scandal over airwave allocations in 2008 that rocked the ruling Congress Party-led government after a state auditor said the government may have lost up to $32 billion due to below-market price sales of radio spectrum.

Police have charged 19 people and three companies in that case and their trials are ongoing.

The Supreme Court had asked the CBI to investigate any possible irregularities in the granting of mobile permits from 2001 to 2007. The CBI estimated a potential loss of Rs 846 crore in government revenue due to the alleged irregularities in 2002, Singh said.

The agency alleged in the charge sheet that the DoT had increased the base spectrum for telecom companies from 4.4 MHz to 6.2 MHz during Mahajan's tenure and also allocated extra spectrum on subscriber-based criteria.

It alleged that Mahajan had allotted addition spectrum to these companies in a hurried manner and in contravention with the then telecom policy.

The accused have been charge sheeted under section 120-B (criminal conspiracy) of the IPC and various provisions of the Prevention of Corruption Act relating to misconduct by public servant by accepting illegal gratification by abusing his official position.

Detailing the roles of accused named in the charge sheet, the CBI said Ghosh, a 1965 batch retired IAS officer, in conspiracy with Mahajan and telecom firms, abused his official position to show undue favour to the companies causing a loss of Rs 846.44 crore to the exchequer.

"Investigation has revealed that Shyamal Ghosh, then chairman of Telecom Commission and Secretary DoT, in conspiracy with late Pramod Mahajan, then telecom minister and the accused beneficiary companies i.e Hutchison Max Pvt Ltd, Sterling Cellular Ltd and Bharti Airtel Ltd through their representatives, abused his official position as public person and showed undue favour which caused loss of Rs 846.44 crores to the government exchequer and corresponding undue gain to the aforesaid telecom companies," it said.

The CBI said that Ghosh "deliberately" and with "malafide intention" did not obtain comments of then Member (Finance) of DoT despite the issue involving huge "financial implications".

"Investigation has therefore revealed that Shyamal Ghosh deliberately with malafide intention did not obtain the comments of the then Member (finance), who was representative of the Ministry of Finance, despite the matter having huge financial implications.

"The wireless advisor, who was the custodian of the entire spectrum, was also intentionally bypassed on filmsy grounds that he was retiring on that very day i.e. on January 31, 2002," it said.

The CBI said that even before the joint testing report, regarding congestion/service quality in the network area of the telecom operators, could be received by the DoT, a decision was taken by Mahajan and Ghosh to allocate additional spectrum to these companies.

"Investigation revealed that in fact, the joint testing (in respect of congestion/service quality in the network area) was conducted during the period of January 17, 2002 to January 23, 2002 but the joint testing report was submitted on February 1, 2002, by which time the said decision had been taken by late Pramod Mahajan in connivance with Shyamal Ghosh and the said accused telecom companies," it said.

The agency further said additional spectrum was allotted to these firms on July 17, 2002 by the DoT.

"Investigation has further revealed that pursuant to the aforesaid criteria formulated on February 1, 2002, Department of Telecom (DoT), through WPC wing, coordinated spectrum for the three accused companies and the additional spectrum was allotted on July 17, 2002 to Bharti Cellular Ltd and Sterling Cellular Ltd for Delhi metro area and M/s Hutchison Max Telecom Ltd for Mumbai metro area," the charge sheet said.

Detailing the FIR lodged in the case on November 17 last year, the agency said that the accused public person, in pursuance to the conspiracy, charged additional 1 per cent AGR (adjusted gross revenue) for allotting additional spectrum from 6.2 MHz up to 10 MHz (paired) instead of charging additional 2 per cent AGR as per the existing norms.

"It is thereby alleged in the FIR that the accused public servants entered into a criminal conspiracy with the accused beneficiary companies by abusing their official position as public servants and showed undue favour to accused companies and caused undue cumulative pecuniary advantage of Rs 508.22 crore approximately to the beneficiary companies and corresponding loss to the government exchequer by only charging additional 1 per cent AGR (adjusted gross revenue) for allotting additional spectrum from 6.2 MHz upto 10 MHz (paired) instead of charging additional 2 per cent AGR as per existing norms," it said.