This Article is From Feb 17, 2011

2G spectrum scam: Former Telecom Minister A Raja sent to Tihar Jail

New Delhi: Former Telecom Minister A Raja has been sent to Delhi's Tihar Jail till March 3. Raja will be in judicial custody for the next 14 days. He was arrested by the Central Bureau of Investigation (CBI) on February 2 in connection with 2G spectrum scam. His CBI custody ended today.

Sources say the CBI told the court today that Raja was not cooperating with the investigators and so it needed more time to question him.

Raja, the alleged mastermind of the 2G scam, is accused of selling spectrum at throwaway prices to companies in 2008 when they applied for mobile network licences.

On Wednesday, the CBI questioned Raja and Reliance Communication's Anil Ambani together for an hour. Ambani was reportedly questioned in connection with his company Reliance Communications being looked at as a beneficiary of 2G spectrum licence. The investigating agency is questioning all telecom players that got licences. The key issue the agency wanted to ask Anil Ambani was about Reliance Communications' investment in Swan Telecom. The CBI also wanted to check if Reliance met all the eligibility norms or if they were favoured by then Telecom Minister A Raja. The promoter of Swan Telecom, Shahid Balwa, was arrested by the CBI last week and has also been questioned.

The CBI has accused the DMK leader of criminal conspiracy. It says that in 2008, when the government was allocating 2G spectrum for mobile phone networks, Raja twisted the rules to benefit a few companies - especially Swan and Unitech.

The licences for 2G spectrum were not auctioned as many say they should have been. Raja chose to follow a First-Come-First-Served policy which was set by his predecessors. But the CBI's case is based on his office advancing the deadline for payments and informing only some of the players.  Companies like Swan and Unitech seemed to have been tipped off to this, because despite the cut-off date being brought forward, they had their payments ready.


After winning their licences, Swan and Unitech sold equity to foreign companies much before they began the rollout of their services.  The giant profits they made seemed to underscore the point that spectrum had been sold far too cheaply by the government.

Swan paid Rs 1,537 crore and sold 45% stake to Etisalat for a profit of Rs 4, 730 crore.

Unitech paid Rs 1,661 crore for its licence, and sold 60% stake to Telenor for Rs 6,200 crore.

Together, these two players cost the government Rs 7, 195 crore, according to the CBI. But both Swan and Unitech have denied these allegations.