2G scam 1

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8/6/2019 2G scam 1


� 2G is Second- generation wireless telephone

technology

� 2G is not just a network but a good technology

� 2G spectrum technology was first launched in

1991

� 2G spectrum was the revolutionary technology

& it comes with some more benefits:-

SMS facility was first started with network.

Safe for the use, means security level was high.

Environmental conditions was very good for

this network & network shortage was there.

WHAT IS WHAT IS 2G2G

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HISTORY OF 2GHISTORY OF 2G

�

2G spectrum technology was firstlaunched in 1991 in Finland onlyin the GSM mobile phones.

� After 2G was launched, the

previous mobile telephonesystems were retrospectivelydubbed 1G

� As 2G was launched in 1991 somany other technologiesovercome it with 2.5G, 2.75Gtechnologies but the latesttechnology in present world is 3G.

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THE 2G SPECTRUM SCAM THE 2G SPECTRUM SCAM

� The 2G spectrum scam involved officials and

ministers in the Government of India illegally

undercharging mobile telephony companies for

frequency allocation licenses, which they would

use to create 2G subscriptions for cell phones.

� The 2G spectrum licenses allocation scandal isone of several to have emerged in the past few

months, tarnishing the reputation of Prime

Minister Manmohan Singh, whose government

has gone on the defensive against an emboldened

opposition.

� The scandal has tarnished the Congress-led UPA

government¶s image, spooked investors and has

led to the Norwegian Prime Minister writing to

his Indian counterpart seeking ³fair treatment´ for

Telenor.

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A. Raja (Born May 10, 1963, Perambalur, Tamil Nadu, India) is an

Indian politician from the Dravida Munnetra Kazhagam(DMK) political

party. Raja was first elected to the Lok Sabha in 1996 and first served as

minister of state from 1999 to 2003. On being re-elected to the Lok

Sabha in 2004, he became a cabinet minister in the UPA government. In2007, he became cabinet minister for communication and information

technology. On being re-elected in 2009 he was again appointed cabinet

minister for communication and information technology until being

tainted in the 2G spectrum scam and resigning in 2010.

WHO IS THIS WHO IS THIS

PERSON?PERSON?

One of the main person behind the

Indias Largest Corporate Fraud.

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WHAT ARE THE CHARGES ON FORMER WHAT ARE THE CHARGES ON FORMER

TELECOM MINISTER TELECOM MINISTER A. RAJA?A. RAJA?

CHEAP TELECOM LICENSES

Entry fee for spectrum licenses in 2008 pegged at 2001 prices

Mobile subscriber base had shot up to 350 million in 2008 from

4million in 2001.

NO PROCEDURES FOLLOWED

Rules changed after the game had begun. Cut-off date for applications advanced by a week.

Licenses issued on a first-come-first-served basis.

No proper auction process followed, no bids invited.

Raja ignored advice of TRAI, Law Ministry, Finance Ministry.

TRAI had recommended auctioning of spectrum at market rates.

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BENEFITS OF SCAMBENEFITS OF SCAM

The CAG's report details how the telecom

ministry under Raja went about allotting thespectrum licenses on the cheap, defyingmarket logic, government directives and rules,and calls for transparency

On January 10, 2008 ISSUED LICENSES TO 121

COMPANIES

It had received 575 applications, 408 of whichwere filed after the September 24 pressrelease -- an indicator of the huge unsatisfieddemand for scarce spectrum.

DUE TO THE FIRST COME- FIRST BASIS, itactually favored a few bidders who seemed tohave been privy to advance information.

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CORPORATE PERSONALITIESCORPORATE PERSONALITIES

INVOLVEDINVOLVED

Anil Ambani - Reliance

Group (ADAG)

Shahid Balwa- DB

Realty (Swan Telecom)

Vinod Goenka-

Dynamix Group

Venugopal Dhoot-Videocon Group

Prashant Ruia -Essar Group

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Nira Radia, a former airline entrepreneur turned corporate lobbyist

whose conversations with politicians and corporate entities were

recorded by the government authorities and leaked creating the

³Nira Radia tapes controversy´.

MEDIA PERSONS AND LOBB YISTS MEDIA PERSONS AND LOBB YISTS

INVOLVEDINVOLVED

Barkha Dutt, an NDTV journalist alleged to have

lobbied for A.Raja's appointment as minister.

Vir Sanghvi, a Hindustan Times editor alleged to have

edited articles to reduce blame in the Nira Radia

tapes.

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IMPACT ON STOCK IMPACT ON STOCK MARKETS MARKETS

� The first casualty in Stock Markets once Raja

was arrested was DB Realty.

� DB Realty had given 200+ crores to Kalaignar TV (owned by Karunanidhi's Wife) .

� The news led to 20% fall in the stock prices of DB Realty.

� Sun TV CO. refused the allegations. SwanTelecom Chief Balwa was arrested on Feb 8and this led to rumours of links with AnilAmbani's Reliance ADAG and it led to 20%

fall of his stocks. Its reported that nearly 2Billion USD was eroded from his stocks.Spicejet stocks went down after reports of investigation on Maran's recent takeover of Spicejet.

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Unitech Group:A real estate company entering the telecom industry with its 2G bid; sold 60% of

its company stake at huge profit to Telenor after buying licensing (Including land

values properties for towers).

Swan Telecom:

It sold 45% of its company stake at huge profit to Emirates TelecommunicationsCorporation (Etisalat) after buying licensing.

Videocon Telecommunications Limited

Reliance Communications

Sistema Shyam Mobile (MTS) Sistema Mobile Russia

Tata Communications Vodafone Essar

Loop Mobile

S Tel

Dishnet Wireless

Allianz Infra

CORPORATIONS INVOLVEDCORPORATIONS INVOLVED

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RESPONSE TORESPONSE TO SCAM SCAM

� In early November 2010 Jayalalithaa accused the Tamil Nadu state chief

minister M Karunanidhi of protecting. A.Raja from corruption charges and

called for A. Raja's resignation. By mid November A.Raja resigned.

� In mid November the comptroller Vinod Rai issued show-cause notices toUnitech, S Tel, Loop Mobile, Datacom (Videocon), and Etisalat to respond

to his assertion that all of the 85 licenses granted to these companies did not

have the up-front capital required at the time of the application and were in

other ways illegal.

� In response to the various allegations , the Govt. of India has replaced the

then incumbent Telecom minister ,A Raja with Kapil Sibal who has taken up

this charge in addition to being the Union minister for Human Resources

Development. Mr Sibal contends that the "notional" losses quoted are a

result of erroneous calculations and insists that the actual losses are nil.

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STEPS TAKEN B Y GOVERNMENT STEPS TAKEN B Y GOVERNMENT

AFTER SCAMAFTER SCAM

� Set up a special branch of CBI to look into the matter.

� Telecom Minister resigns his post after Scan.

� A Raja also arrested by the Police.

� CBI is also interacting with the brothers of A Raja and

also some business men.

Government of India take some important steps looking

forward in this Scan:

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RELATION TO BUSINESS ETHICSRELATION TO BUSINESS ETHICS

� If we talk about the Administration of India we all must say itis not a well maintained or a well centralized Administration ascomparison to other Asian countries.

� Poor Administration of India is just because of the poor political leaders of our country. They used to do someunofficial work for the sake of money, this makesAdministration of India weaker. This is not the only examplewhich makes Administration of India affected badly there are

lots of other factors which makes it worse.

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PRESENTED B Y:PRESENTED B Y:--

TMS-179 JEHAN MEHTA

TMS-180 MIT MEHTA

TMS-181 PRERIT MEHTATMS-182 RUCHI MEHTA

TMS-183 SABA MEMON

TMS-184 NIDHI MERCHANT

2G scam 1

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