2g presentation

7/18/2019 2G Presentation

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Radiagiri by RajaCommunication at its Best



Scam Overview

2G Spectrum Scam

CWG Scam

Adarsh Land Scam

Satyam Scam

Disclaimer:- This presentation is for educational purpose only and the whole data is

taken from the CAG report and various internet sources.



CommonWealth Games

Scam Initial budget of s !"## crorewas shot up till s $%%%% crore&

Out of that only s '(% crore

was spent on sportspersons )otal G*+ ,-(%-%%% were

transferred to ./ basedcompany during the 0ueen1s

baton relay without any properservices from the concernedcompany in ./



Adarsh Land Scam

A 2$ Storey *uilding wasconstructed on the land ofthe army&

)he land was supposed tobe used for the widows ofthe /argil wars martyrs&

Several army ocialsincluding former army chief3eepa4 /apoor himself had5ats in the society&



Of Satyam1s reported cash and ban4balances of ('&7! billion rupees- (%&, billionrupees was non8 e9istent

Operating margin was ' percent of revenue-instead of the reported 2, percent

)he company1s revenue was 2! billion rupees-22 percent less than the in5ated :gure of 2$

billion rupees that had been reported& a;u arranged !2&' billion rupees <to 4eepoperations going= at Satyam over the last twoyears by pledging the founders1 shares andraising funds from other sources



2G Spectrum Scam



What is Spectrum

)he word >Spectrum> basically refers tothe collection of various types ofelectromagnetic radiations of di?erent

wavelengths radiation which is used ascarrier of wireless transmission and thusa basic re@uirement for providingwireless services&



ASSIGB) OD A3IOD0.CIS



Bar4et for mobilecommunication



Growth Of )elecom etwor4



ole of egulator

)o ma4e recommendations regarding eed E timing for introduction of new

service providers

)erms E conditions to be implemented cient management of the available

spectrum



+rocess Dollowed

Application for issue of license were notprocessed within stipulated period andwere delayed from 2'2 to #7# days

.ndue haste in receiving and processingapplications



Approvals not )a4en

Approval from )elecom Commission notta4en Beeting held in Oct 2%%$ were not recorded

anywhere on the paper& 3o) chose to consider the

recommendations without the inputs fromthe important secretaries&



Advice Ignored

Advice from the Binister of Law E ;usticeFBoLHwas ignored& 3ue to heavy rush i&e& ,%" re@uests in " days and

to process it fairly BoL was re@uested the opinion

of the Attorney GeneralSolicitor General Advice given by the BoL J8 Dirst the issue to be

considered by the mpowered Group ofBinistersFGoBH and in that process opinion ofAttorney General is to be ta4en

)his observation was considered out of conte9t bythe Binister of Communications EInformation )echnologyFBoCEI)H and thus the reference wasdeliberately avoided&



+B Suggestion Ignored

+B advised BoCEI) that 3o) shouldconsider Introduction of auction

evision of ntry Dee BoCEI) ignored it stating

nough scope of allotment of spectrum

Bore operators will increase competitionleading to better services and lower tari?&



Concerns of BoD Ignored

In ov 2%%$ Binistry of DinanceFBoDH@uestioned about continuing with a pricedetermined way bac4 in 2%%! without

any inde9ation& 3o) @uoted the decision of Oct 2%%'

stating that it was authorised tocalculate the entry fee for licensesdepending on the date of payment&



Activities on !%th an %"

+ress information was issued that all theplayers having applied till 2(th Sep 2%%$will get the Letter of IntentFLoIH

Dirst Come Dirst Serve +olicy would befollowed and whosoever complies withthe condition of LoI would be granted thelicense&

)his second condition violated the DCDS

policy&




3o) had proposed to give the license tothe senior applicant in case of more thanone applicant complied with the LoI on

the same day *ut BoCEI) personally deleted this

provision saying that it was notnecessary as it is a new stipulation




!' applicants submitted pre8dateddemand drafts

DCDS policy not followed

)hus the whole process lac4edtransparency for favoring few :rms overothers



.ndue Davor to Dirms

Swan )elecom pvt ltd who had submittedthe application on 2nd Bar 2%%$ was giventhe spectrum on 2"th Aug 2%%" ahead of

Spice Communications Ltd for which theapplication was submitted in Aug 2%%7 for3elhi Area

Similarly for Baharashtra- Spice got the

spectrum in Bay K%#F3oAJ8Aug 2%%7Hbehind the .nitech and ideocon who gotin Sep K%"F3oAJ8Sep 2%%$H



License to IneligibleApplicants "( Licenses out of !22 new licenses

issued to !' companies were granted tothose companies who did not satisfy the

eligibility conditions All the "( applicants did not satisfy the

condition of paid up capital

,( applicants failed to satisfy the conditions

of Bemorandum of Association



Bisrepresentation of Dacts

Si9 newly incorporated companies of .nitechGroup E AMare Group F*randJ8 .ninorH E AllianMInfratech +vt LtdFtisalat 3* +vt LtdH Applied with altered BOAAOA indicating the main ob;ect

clause of )elecom sector without prior approval of OC Ethe Central Government

BOAAOA was altered on 2%th Sep 2%%$ E 27th Oct 2%%$respectively and approved by OC in Bay 2%%" for bothbut application was submitted on 2,th Sep 2%%$&

)hus the full disclosure of the factual position was notmade of the alteration of the main clause of BOAAOA



+aid .p Capital

+aid up capital was one of the importantconditions to be eligible to apply forlicense

Service Area AJ8 s !% Crore Service Area *J8 s ( Crore

Service Area CJ8 s ' Crore



Dalse Nigher +aid up Capital

ight applicants belonging to brand .ninor Incorporated between Aug8Sep 2%%$ with s (

la4h each

+assed special resolution on 2%th

Sep 2%%$ toincrease the paid up capital

3eposited the stamp duties on %'rd Oct 2%%$ Esubmitted on %(th Oct 2%%$

Certi:cate by OC issued on %"!! Oct 2%%$ butthe application of the license was made on 2, th Sep 2%%$&

)hus the claim was :ctitious and false



Dalse Nigher +aid up Capital

3atacom Solutions +vt LtdFideocon )elecommunications LtdH Bade false claim of +aid up capital of s

!(% Crore while in BOAAOA it was s !La4h only on 2"th Aug 2%%$

On 2$th ov 2%%$- the company submitteda correct version stating that by mista4e

the old version of BOAAOA was submittedof s ! La4h instead of s !(% Crore&



Access to 3ual )echnology

3ual )echnology means that theoperator would give both C3BA E GSBservices

)AI ecommendations ew player in the alternative technology

would pay same fee as given by e9istinglicenses&

)his new player would be considered asany other e9isting player in terms ofpriority of issue of license



.ndue *ene:ts

3o) issued a press release regarding the sameon !#th Oct 2%%$&

*ut before the press release- on !"th Oct 2%%$itself in principle approval for using GSB

)echnology was given to eliance- Shyam ENDCL

)ata )eleservices applied for it after pressrelease but was not given the license till an2%%"&

eliance had given the drafts of s !7,( Croreon !#th Oct 2%%$ itself which were not in orderthrough its sister concern eliance Infocomm Ltd



.ndue Advantage in Allocation ofSpectrum

In +un;ab area- !( BNM was available inSep 2%%" enough to cater the demand of:rst three applicants&

)he players were NDCL- Idea E .nitechWireless

Idea was not considered due to proposed

merger with Spice telecom but as perthe 3o) merger guidelines it was wrong&



.ndue Advantage in Allocation ofSpectrum

Swan )elecom- who was given thepreference in place of Idea was the ,th +riority

)he identical situation was inBaharashtra where in Idea was re;ectedon the same grounds and the bene:ciarywas Swan )elecom



Spectrum Allocated beyondlimit # operators were allotted spectrum

beyond limit as per the guidelines issued

o e9tra charges imposed as per the

mar4et conditions&



Spectrum Allocated beyondlimit



oll Out Obligations notful:lled As per the license conditions- licensee1s

were re@uired to roll out the services in the#% of metro areas and !% of 3istrict

Nead@uarters within !2 months of the dateof award&

7 operators got the license from Apr 2%%"to an 2%%# but none of them had started

their services till '!st 3ec 2%%#& 3o) failed to recover the penalty of s 7$#

Crore from these 7 operators for the delay&



Dinancial

ImpactSource:-Indian !press



Dinancial Impact

ntry fee was e9pected to re5ect the valueof spectrum )here was a two phase program where in the

:rst one is to pay entry fees and get the license

to operate )he second phase was to delin4 the license from

the prices of spectrum and allotment ofspectrum to be done by way of auction&

)AI in Aug 2%%$ recommended that noauction should be there but the price of 2%%!should be reassessed through a mar4etmechanism&



.nderpricing E Loss

On (th ov 2%%$ S )el Ltd who had appliedfor the license in Sep 2%%$ had written to +B )o pay additional revenue share of s 7%%%

Crore for +A india over and above the

spectrum chargerevenue share payable as pere9isting policy& Durther letter to 2$th ov 2%%$- S )el had

written to BoCEI) nhanced the o?er from s 7%%% Crore to s

!'$(2 Crore over a ten years of allotment& Also agreed to increase the bid price if any

counter bid is there&



+rice of S )el considered



alue based on 'GSpectrum )AI in its report in 2%!% has observed

that 2G services are actually o?ering2&$(G services

)herefore while comparing spectraleciency and other factors it is fair tocompare it with 'G systems&



Loss as per 'G systems

S l f it



Sale of @uitys in Crores



9tra Spectrum AllocatedLoss )he value of this e9tra allotted spectrum

wor4ed out to be s 2(7! Crore thoughits mar4et value would be much higher&

)echnical committee recommendedupfront charges e@uivalent to 'G priceauction from the date of assignmentwhich would increase the loss :gure tos '7-##' Crore&



Indicators of the alue of2G

I t h ll



In a nutshell



What is Lobbying

3escribed as attempt to in5uence thedecisions of the government&

According to ncyclopedia *ritannica-

the term comes from the fact thatattempts to put pressure on legislators in*ritain often too4 place in the lobbyad;acent to the legislative chamber

o regulations in India but it is not illegal

either&



Lobbying In India

As per 3ilip Cherian- founder of a publicrelations agency and also a well 4nownlobbyist saysJ8

Lobbyist functions as a bridge betweencompanies E government

Nelping the clients to understand the policyenvironment of the country&

Identifying 4ey players in policy area whichcan be political parties- bureaucrats- centralgovt etc



*ig Lobby Groups In India

Dederation of Indian Chambers ofCommerce and IndustryFDICCIH

Confederation of Indian IndustryFCIIH

ational Association of Software andService CompaniesFASSCOBH

Several other pvt lobby :rms includeaishnavi Communications by ira

adia- 3)A Associates by 3eepa4 )alwar Individual lobbyist also such as )ony esudasan representing A3AG group&



Who is ira adia

A *ritish CitiMen-adia moved fromngland to

Sura;4und- Indiaafter ta4ing divorcefrom /utchi*usinessmen- ana4

adia



adia1s +ro:le

Bs ira adia1s :rst assignment in India was tosmoothen entry of Singapore Airlines in !##%1swhich introduced her to then Aviation BinisterAnanth /umar E atan )ata who was to beSingapore Airlines +artner

She created ripples in aviation ministry in 2%%%when she applied for a license to start an airlineunder his own :rm with a capital of s ! La4h&

It was her second meeting with atan )ata that

she was appointed to manage the corporatecommunications of the )ata Group leading to thebirth of aishnavi Corporate Communications in2%%!&



adia1s +ro:le

Ner client list spans some of the world1s largestaircraft leasing companies of which some areILDC- Singapore Airlines and AA

After her client list went upto (% big clients and

then she had the most powerful industrial baronin India i&e& Br& Bu4esh Ambani who wantedhelp in media management in the year 2%%"8%#

At pea4 in 2%%#8!%- she was managing the

media E lobbying for the two India1s biggestcorporates& Ner various :rms are estimated to earn around

s !%% crore to s 2%% crore&



As a lobbyist

Ner phone calls which were tapped andrecorded- allegedly- by the Indian Income )a93epartment in 2%%"8%# showed her lobbying forappointment of Cabinet Binisters e9 3B/-including A a;a- through ;ournalist *ar4ha 3utt

and 3B/ chief /arunanidhi1s daughter/animoMhi&

)hese phone recordings led to the unveiling ofthe 2G spectrum controversy of a record P,%billion involving former )elecommunications and

I) Binister A& a;a and other politicians-corporates and industrialists- governmentocials- middlemen and media persons



Actions )a4en

A a;a- the )elecom Binister was sac4ed&

)he possibility of the involvement ofother prominent personalities cannot be

ruled out so a demand for a oint+arliament Committee for in@uiry of thiswhole scam was strongly recommendedby the opposition party&



+C Constitution

On 22nd Deb 2%!!- +B :nally succumbedto the demand of opposition of +C andagreed to it&

A '% member team was announcedwhich comprised of 2% Lo4sabhamember and !% a;yasabha members ofwhich Br& C& Chac4o was made thechairman&

i t + li t



oint +arliamentaryCommitee Bandated to in@uire into a speci:c sub;ect- a +C is constituted either through a motionadopted by one Nouse and concurred by theother- or- through communication between the

presiding ocers of the two Nouses& )hemembers are either elected by the Nouses ornominated by the presiding ocers

A +C can obtain evidence of e9perts- publicbodies- associations- individuals or on re@uestsmade by them& If a witness fails to appearbefore a +C in response to summons- hisconduct constitutes a contempt of the Nouse&



Nistory of +C

On August 7- !#"$the :rst +C wasinstituted to in@uire intothe *ofors contract on a

motion moved by thendefence minister / C+ant in the Lo4 Sabha&India got nothing after

+C in this case&



Nistory of +C

)he 2nd +C wasformed to in@uiryinto Narshad Behta

scandal&)herecommendations ofthe +C were neitheraccepted in full nor

implemented by thegovernment of India&



Nistory of +C

'rd +C was set up toin@uire into Stoc4Bar4et Scam&

Chairman of thiscommittee Q *+member Lt Gen+ra4ash Bani

)ripathi& eport wasnot implemented



Nistory of +C

,th last +C was to in@uireinto pesticide residues insoft drin4s- fruit ;uice andother beverages and toset safety standards& )he report con:rmed thatsoft drin4s did have

pesticide residues andrecommended stringentnorms for drin4ing water&

+ bli A t



+ublic AccountsCommitteeF+ACH Naving !( members of the Lo4 Sabha and

seven members of the a;ya Sabha- thechairmanship of the +AC conventionally goesto a nominee of the main opposition party&

)he +AC calls upon ministries to e9plaincases of :nancial irregularities&

)he +ublic Accounts Committee of+arliament is supposed to conduct a detailed

e9amination of the reports of the Comptrollerand Auditor8General FCAGH- scrutinising theyearly accounts of the Government



Latest +roceedings

)ata- Ambani to face +AC over 2G probe

C*I said that Swan )elecom E Loop )elecom were used as front companies to

get spectrum in which they will be facingcharge of <cheating= and <criminalconspiracy=

A ew )elecom +olicy 2%!!F)+ 2%!!H is

being proposed which will replace theolder )+ ## which would be ready by endof the year&



Latest +roceedings

)he e9ecutives- .nitech Wireless Ltd1smanaging director San;ay Chandra- AnilAmbani8owned eliance Group1s

managing director Gautam 3oshi- andsenior vice8presidents Nari air andSurendra +ipara- and 3* ealty Ltdmanaging director inod Goen4a- weresent to ;ail for their alleged involvementin the issue of telecom licences andspectrum in 2%%"



)NA/ RO.

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