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2G scam: Where’s the missing Rs 1.76 trillion?

Kanimozhi, one of the accused in 2G scam,  CC BY-SA 3.0, https://commons.wikimedia.org/wiki/File:Kanimozhi_in_Madurai.jpg

While second generation (2G) mobile networks maybe passé with the world waiting for fifth generation (5G) mobile networks to go live, the 2G spectrum allocation scam (popularly known as 2G scam) that occurred circa 2008 still continues to haunt India.

Dubbed by Time magazine in 2011 as the second biggest abuse of power after the ‘Watergate’ scandal that cost American President Richard Nixon his position in 1974, the 2G scam is said to have robbed the Indian government a mind-boggling amount of Rs 170,000 crore.

It also placed the prime accused ex-telecom minister A Raja in the magazine’s Hall of Shame ahead of the Libyan autocrat Muammar Gaddafi (captured and killed in October 2011) and North Korean Kim Jong-il (who died in 2011 too).

Raja along with other politicians and bureaucrats is said to have awarded 2G mobile phone services licenses arbitrarily to nine telecom companies at knockdown prices on a first-come-first-serve basis. By undercharging companies some of which didn’t even have any prior experience in the telecom sector and by refusing to auction in the first place, Raja cost the government the staggering amount.

In his defence, Raja said he had deliberately undercharged so as to keep the tariffs low and denied any losses. However, it was soon established that there was a massive scam with the Comptroller and Auditor General (CAG) pegging the lost amount. Raja was stripped of his responsibilities and Kapil Sibal was made the telecom minister in his place.

Sibal too came to the government’s defence by doing some math to prove that there was no loss incurred in the allocation of the spectrum. This was dismissed as well and the lengthy legal proceedings began to nail the culprits involved in the scam.

Five years have elapsed since then and finally a resolution seems near with the special Central Bureau of Investigation (CBI) court, in charge of case, on the verge of completing the hearing. In the protracted and complicated process many have been given clean chits while many new people such as Ratan Tata have been probed.

And as the nation waits with bated breath to see what happens in the massive money laundering case, here’s a look at those who have been accused of pocketing money from it and what they have done with it:

A Raja: In 2011, the CBI and the Income Tax Department alleged that A Raja had received an enormous Rs 3,000 crore as kickbacks. It is said that he used bank accounts under his wife’s name in Mauritius and Seychelles to park the money overseas. The Enforcement Directorate (ED), which also joined the investigation, examined if the money had been sent in the countries of Norway, Cyprus, Dubai, Moscow, British Virgin Island, Isle of Man, Jersey Island and Singapore, as well.

K Kanimozhi: Daughter of five times chief minister of Tamil Nadu M Karunanidhi and currently a member of the upper house of Parliament Rajya Sabha, Kanimozhi is said to have gotten DB Realty – a realty firm that was one of the winners in the sale of 2G spectrum – to route Rs 200 crore to family-owned Kalaignar TV.

It was done in a roundabout manner by sending the money via Kusegaon Fruits, Vegetables Pvt Ltd. and Cineyug Films Pvt Ltd to DMK-run Kalaignar TV so that it appeared like a transaction. But the ED declared that there were no such transactions as claimed by the guilty party.

Kanimozhi’s step-mother Dayalu Ammal and step brother M K Stalin have also been questioned in the case by the CBI and ED.

Siddharth Behura and R K Chandolia: Siddharth Behura, who was then telecom secretary, and R. K. Chandolia, who was private secretary to Raja, are said to have shut counters to prevent other telecom companies from applying once the application deadline time was declared between 3:30 and 4:30 pm. The kickbacks they received for it is yet to be established so far.

All of the above four along with the executives from companies that were awarded licenses are being currently questioned in the court.

The Supreme Court of India, meanwhile, scrapped all the licenses – 122 in all – in 2012. It declared a re-auction which however did not succeed in raking up the pegged amount.

This engendered doubts if the loss figure in the 2G scam was rightly stated. In fact, CAG had listed four figures for losses incurred in the 2G scam.

The first was arrived at based on an offer by telecom operator STel Pvt. Ltd made to the Prime Minister for a pan-India licence; the second and the third based on the sale of equity by Swan Telecom (rechristened Etisalat DB Telecom India Pvt. Ltd) and Unitech Wireless Ltd; and the fourth on the price at which third-generation spectrum was auctioned. The figure fourth was the highest of Rs 1.76 lakh crore (Rs 1.76 trillion) and far exceeded the other figures. One wonders if it has been overstated.

With so many twist and turns in the case and crucial pieces of the puzzle still missing, it might never be known. In a nation plagued by corruption where most cases of blatant abuse of power remain unresolved, it is doubtful how accurate the final verdict will be, if at all it will help recover the money and be able to send the culpable behind bars.