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2G scam: Landmark SC verdict blow for govt, firms
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2G scam: Landmark SC verdict blow for govt, firms
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2G scam: Landmark SC verdict blow for govt, firms
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2G scam: Landmark SC verdict blow for govt, firms

2G scam: Landmark SC verdict blow for govt, firms

India Blooms News Service




New Delhi, Feb 2 (IBNS): India’s Supreme Court on Thursday ordered telecoms licences issued under a scandal-tainted 2008 sale be revoked, delivering a decisive blow against a government that has been grappling to leave behind the fiasco that has roiled the nation for more than a year.


Even though the ruling potentially affects fewer than 5 percent of users in the world's second biggest cellular market, it applies to 122 licences held by eight operators and risks damaging investor confidence besides turning the heat back on a scam-battered coalition government.

However the ruling could also build confidence in the role of the judiciary and efforts to crack down on corruption while possibly bring a multi-billion dollar windfall to a deficit-strapped government once the freed up spectrum is auctioned.

Saying that using a first-come-first-serve policy to allocate national resources like airwaves is dangerous, and designed to benefit any one "with access to power corridors", the court came down on the process that sees former telecoms minister A Raja languish in jail, pending trial.

Delivering a verdict on another closely-watched aspect of the 2G spectrum scam, as it is called because of the type of mobile airwaves involved, the apex court directed a trial court to decide whether the alleged complicity of then Finance Minister P Chidambaram, should be probed.

Justice AK Ganguly and GS Singhvi refused to order the Central Bureau of Investigation (CBI) to probe Chidambaram, saying that the decision must be taken in two weeks by a trial court headed by Judge O P Saini, who is hearing the telecoms swindle case.

Thursday’s verdicts were largely seen as a setback for Prime Minister Manmohan Singh’s Congress-led United Progressive Alliance (UPA) government that has been trying move beyond a policy paralysis that crippled it after the swindle surfaced last year.

The scandal over the alleged allocation of telecoms licences at below-market prices, could have lost the treasury up to Rs 1.76 lakh crore, according to the government’s auditor, the Comptroller and Auditor General (CAG).

Imposing penalties on violating firms, the apex court on Thursday said the Telecom Regulatory Authority in India (TRAI) must ensure issuance of fresh licences, allowing four months to cancel the licences and issue fresh ones by auction.

Uninor has to pay a penalty of Rs 5 crore while Swan Telecom and Tata Telecom will also have to pay the same, media reports said. Loop, S-Tel, Allianz and Sistema Shyam have been fined Rs 50 lakh each.

The licences cancelled by the Supreme Court include 22 of Uninor, 21 of Videocon, 9 of Idea, 21 of Loop, 6 of S-Tel, 21 of Sistema, 3 of Tata Teleservices, 13 of Swan and 2 of Allianz, reports said.

"This is a historic judgement for the reason now these companies which were beneficiaries of these dishonest licences will have to effectively refund the benefits they got," said lawyer Prashant Bhushan who had petitioned to scrap the licences.

"This judgement will send a strong signal to the entire country and the corporate world," he said, adding that it is a strong message to fight corruption and will go down in history and bring change in the manner in which corruption will be dealt with in the country.

The main opposition Bharatiya Janata Party (BJP) senior leader Ravi Shankar Prasad slammed the UPA government over the judgement saying that the Prime Minister knew about the entire scandal and he should have taken a major step against it.

Prasad said: "PM's letter shows he knew everything about the irregularities, why didn't he stop Raja?"

Earlier on Thursday, Telecom Minister Kapil SIbal had said that the Prime Minister Manmohan Singh and former Union Finance Minister P Chidambaram were not responsible for the scam.

"The Prime Minister and the then Finance Minister then (Chidambaram) were in no way responsible for whatever happened," he said.

Reacting to the comments made by Sibal, Prasad said: "People expect that you do your homework well and do not run away far from the reality."

He said after the verdict, “irrespective of the stock market indices, the index of India's integrity has gone high and the credibility of the decision making process of the government stands shattered.”

Opposition left leader Brinda Karat of Communist Party of India-Marxist (CPI-M) said, “The judgement is a historic one and a severe indictment of the government exposing the corporate-politician-bureaucrat nexus as we had been always alleging.”

Meanwhile, Sibal, the current telecoms minister who replaced Raja after he was sent to the Tihar Jail, blamed the scandal on policies implemented by an the BJP-led government that ruled till 2004.

“The telecom policy was initiated by the Bharatiya Janata Party-led NDA (National Democratic Alliance) government and followed by the UPA (United Progressive Alliance),” he said.

Indian stock markets, however, reacted better than expected to the closely-watched ruling as larger, established players were seen benefiting.

Bellwether Bharti Airtel climbed 6.8 percent even amid growing uncertainty over the once-booming sector, as Reliance Communications and Unitech, the Indian partner of Norway's Telenor, fell 3.7 percent and 6.9 percent, respectively.





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2G scam: Landmark SC verdict blow for govt, firms

 

 

 

 

2G scam: Landmark SC verdict blow for govt, firms
 
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