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Saturday, October 24, 2009

CBI zeroes in on DoT offices
23 Oct 2009, 0402 hrs IST, ET Bureau

NNEW DELHI: The Central Bureau of Investigation (CBI) has opened its probe into alleged irregularities in the allocation of wireless 2G spectrum last year with searches on Thursday at the offices of the telecom department here.

The action follows an investigation by the country’s top anti-corruption agency, the Central Vigilance Commission (CVC), which wanted the CBI to dig deeper into the issue.

The searches at the wireless planning cell and the office of the deputy director general- access services came soon after a first information report was registered by the CBI against unnamed officials of the telecom department, as well as individuals and companies, under the Indian Penal Code and the Prevention of Corruption Act. The FIR does not name telecom minister A Raja.

The CVC suspects a criminal conspiracy between senior officials of the telecom department and some individuals and companies in the award of 2G spectrum licences for mobile phone services to eight firms.

The 2G licences, which came bundled with start-up spectrum, were awarded on a first-come-first-served basis early last year. The cut-off date for applications was controversially advanced, which resulted in several companies losing their eligibility for the licence. A pan-India licence was given for Rs 1,651 crore (about $400 million), a price fixed in 2001. Datacom, Swan, Unitech, Loop and S Tel were among the companies that were awarded the 2G licences.

Even before starting operations, Swan offloaded a 45% stake to UAE’s Etisalat for $900 million and Unitech divested up to 67.25% in its telecom venture to Norway’s Telenor for $1.1 billion.

The manner in which the licences were allocated and the sale of stakes by Swan and Unitech caused a political uproar, with opposition parties alleging that spectrum was given away at throwaway prices and allowed the companies to rake in windfall profits.

J Jayalalithaa of the All-India Anna Dravida Munnetra Kazhagam has directly accused Mr Raja of involvement in the scandal, a charge denied by the minister.

On Thursday, Mr Raja said the licences were issued in accordance with principles followed earlier. “Right from 1994 all my predecessors followed the same principle. Process of award of licence and allotments of spectrum was completely transparent.”

The CVC began its probe after it found that the telecom department was apparently unwilling to take action against its officials and other players involved in the award of 2G licences last year.

At its meeting in April this year, the full CVC headed by Pratyush Sinha decided to take the proactive step of summoning documents from the telecom department to fix individual responsibility on ministry officials who had handled the 2G spectrum files.

Among the lapses identified by the CVC are the non-transparent manner of spectrum allocation, the absence of competitive bidding, loopholes in tender documents that allegedly benefited some companies and the fact that the licences were issued in 2008 at a low price fixed in 2001.

Last updated on 23/10/2009

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