The Central Bureau of Investigation (CBI), which is probing multiple cases related to the allocation of telecom spectrum, plans to file a chargesheet against Bharti Airtel Ltd and Vodafone India Ltd as early as next month, two senior agency officials independently said. Neither wanted to be identified.
The move will likely intensify the crisis in the Indian telecom sector, already roiled by litigation, radical policy changes, and a corruption case related to the allocation of 2G or second-generation licences in 2008. Indeed, Bharti and Vodafone are suffering the fallout of the so-called 2G scam. CBI registered this case after the Supreme Court, which was supervising the agency in the 2G scam case, directed the agency in December 2010 to also probe irregularities in the grant of spectrum between 2001 and 2007.
“We are about to complete our investigation in the Bharti and Vodafone cases relating to alleged irregularities in allocation of additional 2G spectrum to these companies during former telecom minister Pramod Mahajan’s tenure (in the Bharatiya Janata Party-led government between 2001 and 2003),” said the first official.
“All accused named in the first information report (FIR) are likely to be charged but a final decision will be taken after we finalize the report. This report goes through multi-level of scrutiny in the agency before filing a chargesheet,” the official added.
The agency had registered a case against the two companies in November last year and conducted searches at their offices. It has already questioned officials of both companies and retired and serving officials of the department of telecommunications (DoT).
Bharti and Vodafone declined to comment.
According to the FIR registered last year, former telecom secretary Shyamal Ghosh and former DoT deputy director general J.R. Gupta allegedly conspired with three private companies—Bharti Cellular (now Bharti Airtel), Hutchison Max and Sterling Cellular (Vodafone India)—and abused their official positions as public servants. No Bharti or Vodafone executive was named in the FIR. “The public servants, with approval of the then minister of telecom, took a hurried decision on 31 January 2002, to allocate additional spectrum beyond 6.2 MHz in violation of the report of a technical committee,” the FIR read.
“It was further alleged that the accused persons showed undue favour and caused undue cumulative advantage of approximately Rs. 508.22 crore to beneficiary companies, including the three aforesaid accused companies, since allocation of such additional spectrum till such decision was reversed by DoT in 2008, and corresponding loss to the government exchequer,” the FIR added.
The second CBI official said the agency is almost ready with the chargesheet. “It was not a big case so it did not take much time to investigate.”
Meanwhile, a five-judge bench headed by Supreme Court chief justice S.H. Kapadia took up the presidential reference seeking clarity on the court’s 2 February verdict that, apart from cancelling 122 telecom licences awarded to nine companies, mentioned in passing that the best way to allot any natural resource was to auction it. In principle, this could affect sectors as disparate as metals, mining, and energy. The Central government was represented by attorney general G.E. Vahanvati who asked the court to advise on what could be referred to as natural resources.
The presidential reference also came under attack from an NGO, the Centre for Public Interest Litigations (CPIL), which told the court that the government’s intent behind the reference was mala fide. CPIL claimed the Centre was “questioning the correctness” of its 2G spectrum case verdict that natural resources in all sectors should be allocated through auction, adding that the court should refuse to answer the questions raised in the reference.
“Under the garb of the presidential reference, you (government) are seeking to question the correctness of the judgement and seeking to overrule the judgement which has reached its finality,” senior advocate Soli Sorabjee, appearing for the NGO, told the five-judge constitution bench.
The court had on 11 May sought responses from state governments, industry lobby groups, CPIL and Janata Party president Subramanian Swamy.
The 2 February verdict followed petitions filed by CPIL and Swamy. It said the first-come-first-served policy for spectrum was illegal and unconstitutional.
Interestingly, the empowered group of ministers (eGoM) looking into the auction of 2G spectrum and headed by home minister P. Chidambaram will meet on 12 July. The eGoM will decide on the reserve price for the spectrum to be auctioned as well as the method and the auctioneer among other matters. For pricing of additional spectrum allotted to incumbent operators, however, the eGoM will act as a group of ministers (GoM) and forward its decision to the Cabinet Committee on Infrastructure. Decisions taken by the eGoM need not be ratified by the cabinet.
The move will likely intensify the crisis in the Indian telecom sector, already roiled by litigation, radical policy changes, and a corruption case related to the allocation of 2G or second-generation licences in 2008. Indeed, Bharti and Vodafone are suffering the fallout of the so-called 2G scam. CBI registered this case after the Supreme Court, which was supervising the agency in the 2G scam case, directed the agency in December 2010 to also probe irregularities in the grant of spectrum between 2001 and 2007.
“We are about to complete our investigation in the Bharti and Vodafone cases relating to alleged irregularities in allocation of additional 2G spectrum to these companies during former telecom minister Pramod Mahajan’s tenure (in the Bharatiya Janata Party-led government between 2001 and 2003),” said the first official.
“All accused named in the first information report (FIR) are likely to be charged but a final decision will be taken after we finalize the report. This report goes through multi-level of scrutiny in the agency before filing a chargesheet,” the official added.
The agency had registered a case against the two companies in November last year and conducted searches at their offices. It has already questioned officials of both companies and retired and serving officials of the department of telecommunications (DoT).
Bharti and Vodafone declined to comment.
According to the FIR registered last year, former telecom secretary Shyamal Ghosh and former DoT deputy director general J.R. Gupta allegedly conspired with three private companies—Bharti Cellular (now Bharti Airtel), Hutchison Max and Sterling Cellular (Vodafone India)—and abused their official positions as public servants. No Bharti or Vodafone executive was named in the FIR. “The public servants, with approval of the then minister of telecom, took a hurried decision on 31 January 2002, to allocate additional spectrum beyond 6.2 MHz in violation of the report of a technical committee,” the FIR read.
“It was further alleged that the accused persons showed undue favour and caused undue cumulative advantage of approximately Rs. 508.22 crore to beneficiary companies, including the three aforesaid accused companies, since allocation of such additional spectrum till such decision was reversed by DoT in 2008, and corresponding loss to the government exchequer,” the FIR added.
The second CBI official said the agency is almost ready with the chargesheet. “It was not a big case so it did not take much time to investigate.”
Meanwhile, a five-judge bench headed by Supreme Court chief justice S.H. Kapadia took up the presidential reference seeking clarity on the court’s 2 February verdict that, apart from cancelling 122 telecom licences awarded to nine companies, mentioned in passing that the best way to allot any natural resource was to auction it. In principle, this could affect sectors as disparate as metals, mining, and energy. The Central government was represented by attorney general G.E. Vahanvati who asked the court to advise on what could be referred to as natural resources.
The presidential reference also came under attack from an NGO, the Centre for Public Interest Litigations (CPIL), which told the court that the government’s intent behind the reference was mala fide. CPIL claimed the Centre was “questioning the correctness” of its 2G spectrum case verdict that natural resources in all sectors should be allocated through auction, adding that the court should refuse to answer the questions raised in the reference.
“Under the garb of the presidential reference, you (government) are seeking to question the correctness of the judgement and seeking to overrule the judgement which has reached its finality,” senior advocate Soli Sorabjee, appearing for the NGO, told the five-judge constitution bench.
The court had on 11 May sought responses from state governments, industry lobby groups, CPIL and Janata Party president Subramanian Swamy.
The 2 February verdict followed petitions filed by CPIL and Swamy. It said the first-come-first-served policy for spectrum was illegal and unconstitutional.
Interestingly, the empowered group of ministers (eGoM) looking into the auction of 2G spectrum and headed by home minister P. Chidambaram will meet on 12 July. The eGoM will decide on the reserve price for the spectrum to be auctioned as well as the method and the auctioneer among other matters. For pricing of additional spectrum allotted to incumbent operators, however, the eGoM will act as a group of ministers (GoM) and forward its decision to the Cabinet Committee on Infrastructure. Decisions taken by the eGoM need not be ratified by the cabinet.