"85 of the 122 licenses were issued to companies which suppressed facts, disclosed incomplete information and submitted fictitious documents to DoT and thus used fraudulent means of getting licenses and thereby access to spectrum" -this is one of the more biting conclusions of the report prepared by the government's auditor, the Comptroller and Auditor General (CAG). (Read: Report Highlights) | (Watch: CAG explains 2G report) | ( Read: Full text of report)
The report - which was leaked to the media last week and forced Raja's resignation - was tabled in Parliament today. It is unflinching in its indictment of Raja, blaming him for violating guidelines, indulging in favouritism and costing the government Rs. 1.76 lakh crores by giving away 2G spectrumn in 2008 at bargain basement prices to inexperienced new players. (Read: What is the 2G spectrum scam?) | (Who is A Raja?)
The CAG report says Raja ignored the suggestions of the Law Ministry, the Finance Ministry, and even the Prime Minister. "The PM had stressed on the need for a fair and transparent allocation of spectrum..... Brushing aside the advice, the Department of Telecom (DoT) in 2008 proceeded to issue licenses for 2G spectrum at 2001 prices, flouting all rules and procedures." (Report Highlights) | (Read: CAG must ensure fair reports, says PM | Full text)
Companies that benefited from Raja's twisted rules include Reliance Telecom (owned by Anil Ambani), which was allocated spectrum ahead of the others. The Department of Telecom, the report says, "did not follow its own practise of first-come first-served in letter and spirit."
The report also states that Swan Telecom was given undue advantage, and that it served effectively as a front for Reliance. The charges in the CAG report are that Swan should not have been considered for a license because Reliance Communications held 10.71% stake in Swan - and according to the rules, a telecom operator cannot own more than 10% stake in another telecom company operating in the same service area . Reliance Telcom issued a statement this evening that declares it did not have any shareholding in Swan when the license was granted (the CAG report's allegation is that Reliance owned stake when Swan applied for the license).
Swan's application should have been rejected initially by DoT, says the report.
The CAG report says that nine companies got more spectrum than stated in their contracts. They include Bharti, Vodafone, Idea, BSNL, Reliance, and Aircel.
CAG indicts Unitech Wireless
Another big beneficiary of the 2G spectrum allocation was Unitech Wireless, which had no experience in the telecommunication sector.
After Unitech got the license for a throwaway price of Rs. 1,661 crore, it sold 60 per cent stake to Telenor Asia for a whopping Rs. 6,200 crore.
In its report, CAG indicts Unitech saying the high value paid by Telenor was for the 2G spectrum, and not for other inputs as claimed by Unitech. It also says that such huge equity infusion, which should have accrued to the public exchequer, went as a favour to the new licensees for enriching their business.
Speaking to NDTV, the telecom giant Telenor said that its investment in Unitech Wireless conformed to all regulations. (Watch)
The political crisis continues
The stand-off between the government and the Opposition over 2G scam continues. The Opposition wants a Joint Parliamentary Committee (JPC) to investigate the 2G scam. The government has said there is no question of agreeing to this. (2G scam: Opposition chants 'we want JPC'; No, says Government)
Parliament has not functioned at all this winter session - the Opposition says it won't let the House get to work till a JPC is announced. (Watch: Let the law take its course, says A Raja)
There were loud and angry scenes in Parliament once again today - the Lok Sabha has been adjourned till Thursday, since tomorrow is a national holiday for Eid.
A lunch meeting with Opposition leaders called by Finance Minister Pranab Mukherjee to try and end the deadlock, has ended without a breakthrough. Mukherjee, who also met senior BJP leader LK Advani at the latter's Parliament office earlier, emerged from the lunch meeting to say, "We are for discussion. No solution has been found yet. They want a JPC." (Read: No breakthrough at Pranab's lunch meet)