Lok Sabha Question No. 6232 (UNSTARRED), answered on 2017-04-12
Subject: Irregularities in 2G Spectrum Allocation
Ministry: COMMUNICATIONS
Asked by: HARISHCHANDRA DEORAM CHAVAN, PRATAPRAO GANPATRAO JADHAV

## GOVERNMENT OF INDIA MINISTRY OF COMMUNICATIONS DEPARTMENT OF TELECOMMUNICATIONS

## LOK SABHA UNSTARRED QUESTION NO.6232 TO BE ANSWERED ON 12 TH   APRIL, 2017

## IRREGULARITIES IN 2G SPECTRUM ALLOCATION

†6232.SHRI HARISHCHANDRA CHAVAN: SHRI PRATAPRAO JADHAV:

Will the Minister of COMMUNICATIONS be pleased to state:

- (a) whether  allegations  have  been  levelled  against  several  companies  with  regard  to irregularities in 2G spectrum allocation;
- (b) if so, the details thereof;
- (c) the outcomes  of the inquiry conducted  against the said  companies  and  the punishment awarded on the basis of the said outcomes, company-wise; and
- (d) the extant status of the cases registered against them company-wise?

## ANSWER

## THE MINISTER OF STATE (IC) OF THE MINISTRY OF COMMUNICATIONS & MINISTER OF STATE IN THE MINISTRY OF RAILWAYS (SHRI MANOJ SINHA)

- (a) & (b)    As per the Central Vigilance Commission, Investigation into 2G spectrum scam is being  directly  monitored  by  Hon'ble  Supreme  Court  .  The  investigating  agencies  such  as CBI, ED & Income Tax directly furnish the status reports to the Hon'ble Supreme Court.

With  regard  to  2G  spectrum  allocation,  CBI  registered  three  regular  cases  as mentioned below:-

## (1)  RC.DAI.2009.A.0045

In  this  case  charge  sheet  dated  02.04.2011  was  filed  in  the  Court  of  Special Judge for 2G spectrum cases  against 17 accused persons including following three companies:-

- (i) M/s. Swan Telecom Pvt. Ltd.,
- (ii) M/s. Unitech Wireless (Tamilnadu) Ltd., and
- (iii) M/s. Reliance Telecom Ltd.
- A  supplementary  charge  sheet  was  filed  in  the  case  on  12.12.2011  against eight accused persons including following three companies:-
- (i) M/s. Loop Telecom Ltd.
- (ii) M/s. Loop Mobile (India) Ltd. and
- (iii) M/s. Essar Teleholdings Ltd.

## (2)  RC.DAI.2011.A.0024

In  this  case  charge  sheet  dated  21.12.2012  was  filed  in  the  Court  of  Special Judge for 2G spectrum cases  against four accused persons including following three companies:-

- (i) M/s. Bharti Cellular Ltd., New Delhi (presently known as M/s. Bharti Airtel Ltd.)
- (ii) M/s. Hutchison Max Pvt. Ltd., Mumbai (Presently known as M/s. Vodafone India Ltd.) and
- (iii) M/s. Sterling Cellular Ltd., New Delhi (Presently known as M/s. Vodafone Mobile Service Ltd.)

## (3)  RC.DAI.2011.A.0022

In  this  case  charge  sheet  dated  29.08.2014  was  filed  in  the  Court  of  Special Judge for 2G spectrum cases against eight accused persons including following four companies:-

- (i) M/s Sun Direct TV (P) Limited;
- (ii) M/s South Asia Entertainment Holdings Limited, Mauritius;
- (iii) M/s Astro All Asia Networks Plc, UK and also at Malaysia
- (iv) M/s Maxis Communications Berhad, Malaysia.

Based on registration of criminal case with regard to irregularities in 2G Spectrum allocation by CBI, the Directorate of Enforcement took up investigation under the provisions of Prevention of Money Laundering Act (PMLA), 2002 and Foreign Exchange Management Act (FEMA), 1999. The action taken by the Directorate so far has resulted into filing of two prosecution complaints and two attachments of the proceeds of crime. Further investigation is  being  carried  out  by  the  Directorate  in  and  outside  India.  Hon'ble  Supreme  Court  in  its order has cancelled all the licenses issued by the Ministry of Communication & IT pertaining to this case.

As per the Central Board of Direct Taxes, relevant cases are at different stages of proceedings of assessment, penalty, appeals etc.

- (c) & (d) As per the Central Bureau of Investigation, the details are as under:
- i.  RC.DAI.2009.A.0045:  The  case  is  pending  trial  at  the  stage  of  final arguments.
- ii.   RC.DAI.2011.A.0024:  The  2G  trial  court  vide  order  dated  15.10.2015 discharged all the accused persons / companies.
- iii.   RC.DAI.2011.A.0022:  The  2G  trial  court  vide  order  dated  02.02.2012 discharged  four  accused  persons  including  M/s  Sun  Direct  TV  (P) Limited and M/s. South Asia Entertainment Holdings Limited, Mauritius.

The case against four Malaysia based accused persons including M/s Astro All Asia Networks Plc and M/s. Maxis Communications Berhad, Malaysia, who did not appear before the court is still pending.

The status report giving details of above mentioned three CBI cases is at Annexure-I.

The  status  of  the  investigation  by  the  Directorate  of  Enforcement  is enclosed as Annexure-II.

Contd…….3/-

## STATUS REPORT IN 2G SPECTRUM CASES  BY CBI

## A)   RC-DAI-2009-A-0045

On receipt of the CVC report, and on the basis of source information, CBI registered a case  on  21.10.2009  for  criminal  conspiracy  and  criminal  misconduct  against  unknown officials of Department of Telecommunications, Govt. of India, unknown private persons/companies and others u/s 120-B IPC, 13(2) r/w 13(1)(d) of Prevention of Corruption Act, 1988.

Investigation into the main offence has been concluded and has revealed commission of offences, during 2007-09, punishable u/s 120-B, 420, 468, 471 of IPC and also punishable u/s 13 (2) r/w 13 (1) (d) of Prevention of Corruption Act 1988 against accused persons, viz. S/Sh A Raja, then MOC&IT; Siddhartha Behura, then Secretary (Telecom); R. K. Chandolia, then  PS  to  MOC&IT;  Shahid  Usman  Balwa,  Director,  M/s  Swan  Telecom  Pvt.  Ltd.,  Vinod Goenka, Director, M/s Swan Telecom Pvt. Ltd.;  M/s Swan Telecom Pvt. Ltd. (now Etisalat DB Telecom Pvt Ltd) through its Director; Sanjay Chandra, Managing Director of M/s Unitech Ltd.; M/s Unitech Wireless (Tamil Nadu) Private Ltd through its Director; Sh. Gautam Doshi, Group  Managing  Director,  Reliance  ADA  Group;  Sh.  Hari  Nair,  Senior  Vice  President  of Reliance ADA Group; Sh. Surendra Pipara, Senior Vice President of Reliance ADA Group & M/s Reliance Telecom Ltd. through its Director.

Accordingly,  a  charge  sheet  against  the  aforesaid  persons  /  companies  was  filed before the court of Special Judge, New Delhi on 02.04.2011.

## FIRST SUPPLEMENTARY CHARGE-SHEET

Subsequently the allegations regarding quid pro quo / suspected illegal gratification of around  Rs.  200  Crores  paid  by  M/s  Dynamix  Realty  (a  DB  Group  company  which  also promotes  /  owns  M/s  Swan  Telecom  Pvt.  Ltd.)  to  Sh  A  Raja,  then  MOC&IT  through  M/s Kalaignar  TV  Pvt.  Ltd.,  following  a  circuitous  route  through  M/s  Kusegaon  Fruits  & Vegetables Pvt. Ltd. and M/s Cineyug Films Pvt. Ltd., was also further investigated.

The investigation disclosed that the amount of Rs. 200 Crores paid by M/s Dynamix Realty to M/s Kalaignar TV Pvt. Ltd, through M/s Kusegaon Fruits & Vegetables Pvt. Ltd. and M/s  Cineyug  Films  Pvt.  Ltd.,  was  not  a  genuine  business  transaction  but  in  the  nature  of illegal  gratification  paid  in  lieu  of  the  UAS  Licences,  valuable  spectrum  and  other  undue benefits shown by accused public servants to M/s Swan Telecom Pvt. Ltd. Accordingly, in addition to the offences charged by CBI against the accused persons in the main chargesheet dated 02.04.2011, accused persons viz. A Raja, Ms. Kanimozhi Karunanithi, Sharad Kumar,  Shahid  Balwa,  Vinod  Goenka,  Asif  Balwa,  Rajiv  Agarwal  and  Karim  Morani  have been  charge-sheeted  vide  a  supplementary  charge  sheet  dated  25.04.2011,  for  offences punishable under section 120-B IPC read with section 7 (alternatively section 11) & 12 of PC Act, 1988.

The Ld. Special Judge, New Delhi took cognizance of the aforesaid charge-sheet and clubbed the same with main charge sheet. The trial of the case was proceeded further and prosecution evidence has been concluded on 27.11.2013. The case is now pending trial at the stage of final arguments.

## Contd…….4/-

## Annexure-I

## LOOP TELECOM - ESSAR  MATTER

As  regards the investigation into the offence relating to alleged cheating by suppression of the violation of Clause No.8 i.e. Substantial Equity Clause of Unified Access Service License (UASL)  Guidelines  dated 14.12.2005 issued by the Department  of Telecommunications  (DoT),  by  suspected  persons  /  companies  belonging  to  M/s  Loop Telecom  /  Essar  group  has  been  concluded.  Investigation  regarding  the  role  of  public servants in the matter of not issuing Show Cause Notice to M/s Loop Telecom Pvt. Ltd. even after having prima facie allegation of violation of said Clause 8 of UASL guidelines, has also been concluded.

After  completion  of  investigation  in  RC-DAI-2009-A-0045  regarding  Loop  Essar matter,  second  supplementary  charge  sheet  was  filed  in  the  court  of  Special  Judge  (2G Spectrum Cases) on 12.12.2011 for the offences punishable u/s 120-B IPC r/w 420 of IPC against  accused  Ravi  N.  Ruia,  Anshuman  Ruia,  Vikash  Saraf,  I.P.  Khaitan,  Ms.  Kiran Khaitan, M/s Loop Telecom Ltd. (erstwhile M/s Shippingstop Dot Com India Pvt. Ltd.), M/s Loop Mobile India Ltd. (erstwhile M/s BPL Mobile Communications Limited) and M/s Essar Teleholdings Ltd.

Final  arguments in the case have been concluded both by the prosecution and the defense. Rebuttal of final arguments by Prosecution has also been completed. Now the case is fixed for clarifications on final arguments, if any.

B) RC-DAI-20011-A-0022: ,  The case was registered by CBI on 9.10.2011 u/s 120-B of IPC r/w Section 13(2) r/w 13(1)(d) of PC Act, 1988 and Sections 7 & 12 of PC Act, 1988 against Sh. Dayanidhi  Maran,  the  then  Minister  of  communications  and  Information Technology, Govt. of India and others. After completion of investigation of this case, a charge sheet was filed on 29.08.2014 u/s. 120-B IPC r/w 7, 12 and 13(2) r/w 13(1)(d) of PC Act, 1988, in the court of Ld. Special Judge 2G Spectrum Cases, against Sh. Dayanidhi Maran, the then MoC&IT and others. The further investigation on some issues is continuing in this case. The trial court vide its order dated 02.02.2017 has discharged three Indian and one Mauritian  accused  persons/companies  which  appeared  before  the  court.  Now  the  case  is fixed in the court for appearance of the remaining 4 Malaysian accused persons/companies.

C)      RC-DAI-2011-A-0024: The  case  was  registered  by  CBI  on  17.11.2011  u/s  120-B  of Indian  Penal  Code  r/w  Section  13(2)  r/w  13(1)(d)  of  PC  Act,  1988  against  Sh.  Shyamal Ghosh, the then Chairman (TC) & Secretary (Telecom), Department of Telecommunications and  others.  After  completion  of  the  investigation  a  charge  sheet  was  filed  in  this  case  on 21.12.2012 in the Court of Ld. Special Judge for 2G Spectrum Cases, u/s 120-B of IPC r/w Sec  13(2)  r/w  13(1)(d)  of  PC  Act,  1988  and  substantive  offences  thereof  against  Sh. Shyamal  Ghosh  and  others.  The  Hon'ble  Trial  Court  took  cognizance  of  the  case  on 19.03.2013 and later discharged all the accused persons vide its order dated 15.10.2015. The CBI has filed a criminal revision in the Hon'ble High Court of Delhi against the impugned order for expunging adverse remarks against CBI officials.

Contd……5/-

Annexure-II Status of the Investigations by the Directorate of Enforcement(ED)

|   Sl. No. | Name of the party to whom UAS Licences were issued   | Action taken by Directorate of Enforcement under PMLA, 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Action taken by Directorate of Enforcement under FEMA, 1999                                              |
|-----------|------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------|
|         1 | Swan Telecom Pvt. Ltd., Mumbai                       |  Proceeds of crime which were licenses have been cancelled by the Hon'ble Supreme Court.  ED has attached properties worth Rs. 223.55 Crore from DB Group companies in the matter of illegal gratification of Rs. 200 Crore to Sh. A. Raja. The attachment order has been confirmed by the Adjudicating Authority and the matter is pending with Appellate Tribunal for PMLA.  ED has filed prosecution complaint against 19 persons (including Swan Telecom Pvt. Ltd. also) before the Special Court. Case is at final argument | Show Cause Notices have been issued for Rs. 10567.14 Crore approx. in the case of Swan Telecom Pvt. Ltd. |
|         2 | Loop Telecom Pvt. Ltd., Mumbai                       | stage.  No bribe money and disproportionate assets traced in the CBI charge sheet.  No PC Act invoked.  No quid-pro-quo in CBI charge sheet.  No dilution of shareholding.  Proceeds of crime which were licenses have been cancelled by the Hon'ble Supreme Court.                                                                                                                                                                                                                                                            | Show Cause Notices have been issued for Rs. 959.73 Crore approx.                                         |
|         3 | Unitech Wireless (Tamilnadu) Pvt. Ltd., New Delhi    |  Offences are not in the schedule under PMLA at that point                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Show Cause Notices have been issued for Rs. 64.56 Crore approx. in                                       |

|    |                                                                                                  | of time.  No quid-pro-quo in CBI charge sheet. Proceeds of crime which were licenses have been cancelled by the Hon'ble Supreme Court.                                                                                                                                                                                                                                                                                | the case of Unitech Wireless (Tamilnadu) Pvt. Ltd.                                                                                                                                                                                                                    |
|----|--------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  4 | S. Tel Ltd., Chennai                                                                             | No action under PMLA in absence of charge sheet by CBI.                                                                                                                                                                                                                                                                                                                                                                | Show Cause Notices have been issued for Rs. 6.89 Crore approx.                                                                                                                                                                                                        |
|  5 | Datacom Solutions Pvt. Ltd. (Videocon Group company), Mumbai                                     | No action under PMLA in absence of charge sheet by CBI.                                                                                                                                                                                                                                                                                                                                                                | No FEMA contravention is noticed.                                                                                                                                                                                                                                     |
|  6 | Idea Cellular, H.O., Noida, Registered office Gandhinagar, Gujrat.                               | No action under PMLA in absence of charge sheet by CBI.                                                                                                                                                                                                                                                                                                                                                                | Show Cause Notice has been issued for Rs. 474.79 Crore approx.                                                                                                                                                                                                        |
|  7 | Tata Teleservices Ltd., Mumbai                                                                   | No action under PMLA in absence of charge sheet by CBI.                                                                                                                                                                                                                                                                                                                                                                | Show Cause Notices have been issued for Rs. 134.04 Crore approx.                                                                                                                                                                                                      |
|  8 | Sistema Shyam Teleservices Ltd., Gurgaon, Haryana.                                               | No action under PMLA in absence of charge sheet by CBI.                                                                                                                                                                                                                                                                                                                                                                | No FEMA contravention is noticed.                                                                                                                                                                                                                                     |
|  9 | Allianz Infratech Pvt. Ltd., Mumbai                                                              | No action under PMLA in absence of charge sheet by CBI.                                                                                                                                                                                                                                                                                                                                                                | No FEMA contravention is noticed.                                                                                                                                                                                                                                     |
| 10 | Spice Communication Ltd., New Delhi                                                              | No action under PMLA in absence of charge sheet by CBI.                                                                                                                                                                                                                                                                                                                                                                | No FEMA contravention is noticed.                                                                                                                                                                                                                                     |
| 11 | M/s Aircel Limited M/s Dishnet Wireless Limited M/s Dishnet DSL Limited (Aircel Maxis Deal Case) |  ED has attached properties worth Rs. 742.58 Crore from Shri Dayanidhi Maran & Ors. The attachment order has been stayed by the Hon'ble Supreme Court.  ED has filed prosecution complaint against 06 persons / entities before the Special Court. The Special Court vide its order on charge dated 02.02.2017 has discharged all the accused. ED is in process of filing revision against the said order on charge. | Show Cause Notices have been issued for Rs. 1767.19 Crore approx. in the case of Aircel Maxis Deal. (Rs. 114.71 crore from M/s South Asia FM Ltd & Ors. and Rs. 1652.48 crore from M/s South Asia Communications Pvt. Ltd. and M/s Deccan Digital Networks Pvt. Ltd.) |

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