Major scams in India

The Top Scams in India

1) 2G Spectrum Scam

2) Commonwealth Games Scam

3) Telgi Scam
4) Satyam Scam
5) Bofors Scam
6) The Fodder Scam
7) The Hawala Scandal
8) IPL Scam
9,10) Harshad Mehta & Ketan Parekh Stock
Market Scam
2G Spectrum Scam

 We have had a number of scams in India; but none bigger

than the scam involving the process of allocating unified
access service licenses. At the heart of this Rs.1.76-lakh
crore worth of scam is the former Telecom minister A Raja –
who according to the CAG, has evaded norms at every level as
he carried out the dubious 2G license awards in 2008 at a
throw-away price which were pegged at 2001 prices
Q. What is the 2G Spectrum Scam?

 In 2008, the union government awarded pan

India licenses and second generation telecom
spectrum to 9 companies in 122 circles for
offering mobile telephony services. These
licenses were awarded in an arbitrary and
non-transparent manner for a paltry sum of `
1658 crores, which was the price discovered
in 2001, when the teledensity was very low.
Who are allegedly involved in the
scam?
 Telecom Minister A.Raja
 Corporate Houses
 Government Officials
 Corporate Lobbyists
 Media Houses
WHAT ARE THE CHARGES ON FORMER TELECOM
MINISTER A RAJA?

CHEAP TELECOM LICENSES 

  Entry fee for spectrum licenses in 2008

pegged at 2001 prices
  Mobile subscriber base had shot up
WHAT ARE THE CHARGES ON FORMER
TELECOM MINISTER A RAJA?
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
WHAT ARE THE CHARGES ON FORMER TELECOM
MINISTER A RAJA?

FAVOURITISM, CORPORATES ENCASH PREMIUM 

 Unitech, Swan Telecom got licenses without any prior

telecom experience
 Swan Telecom given license even though it did not

meet eligibility criteria

 Swan got license for Rs. 1537 crore, sold 45% stake to

Etisalat for Rs. 4200 crore

 Unitech Wireless got license for Rs. 1661 crore, sold

60% stake for Rs. 6200 crore

 All nine companies paid DoT only Rs. 10,772 crore for

2G licences
Politicians involved
 Manmohan Singh
 Kanimozhi
 A. Raja, the Ex-
Minister of Communications and Information
Technology
 Arun Shourie
 Pramod Mahajan
Bureaucrats involved
 Siddhartha Behura,
 Pradip Baijal
 R K Chandolia
Corporations involved
 Unitech Group a real estate company entering the telecom industry
with its 2G bid
 Swan Telecom

 Loop Mobile
 Videocon Telecommunications Limited
 S Tel
 Reliance Communications
 Sistema Shyam Mobile (MTS) – Sistema Mobile Russia
 Tata Communications
 Vodafone Essar
 Dishnet Wireless
 Allianz Infra
Corporate personalities involved
 Anil Ambani - Reliance Group (ADAG)
 Shahid Balwa - DB Realty and DB Etisalat
(formerly Swan Telecom)
 Prashant Ruia - Essar Group
Media persons and lobbyists involved
 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 Nira Radia tapes controversy
 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.
Q. What is the amount of scam involved?

 Based on the subsequent auction of airwaves

for third generation (3G) services, which
fetched nearly Rs. 63,000 crores, and that for
broadband access, which fetched over Rs.
35,700 crores, the notional loss to the
exchequer due to under pricing of 2G
spectrum was estimated by the CAG to be a
whopping Rs. 1,76,000 crores !!
What does Rs 1.76 lakh crore mean to our nation?

• golden quadrilateral Highway project

• RTC buses - Could be a big boost for our defunct public transport.
• buffaloes - Could improve our dairy sector
• Nagarjunsagar dams - Could vastly improve irrigation sector (No
more need for loan waivers)
•Shamshabad airports - Could improve the aviation sector big time.
•Lakh Nursing homes - Could be a big boost of our disastrous
health sector
• Schools - Can go a long way in improving our literacy rate - 65%
• Crore Computers - Could establish India as the IT capital of the
world
• Fighter Jets - Could strengthen our defense system in a big way
Q. Can this money be recovered?

 Yes. Under Section 23 and 24 of the Indian

Contracts Act 1872, a contract becomes void
if it is tainted with corruption. The
government can cancel the current licenses
and recover the lost money by fresh
allocation of 2G spectrum through
international competitive bidding after laying
down transparent eligibility criteria in
consultation with TRAI (Telecom Regulatory
Authority of India).
Q. Did we ever recover such scam money previously?

 Yes. In 2007, the Indian Army did not hesitate to

scrap a $600 million-worth deal for 197
helicopters with Eurocopter, the world’s largest
maker of civil and military helicopters (and a
subsidiary of EADS, the European defence and
aerospace group), following the Central Vigilance
Commission (CVC)’s criticism of the bidding
process and illegal use of middlemen, violative of
the existing policy of prohibiting middlemen in
military deals. The Army subsequently went in for
a fresh and open bidding process.
Q. What should the government do?

 recover the scam money by canceling the

licenses and issue new licenses
 Enact a comprehensive anti-corruption law

and create an Independent Anti-Corruption

Commission (IACC).
 • Enact a Windfall Profits Tax law (on the

lines of the UK law 1997)

 Enact a False Claims Act (on the lines of the

U.S. law).
Q. Do we have enough evidence to prove the scam?

 There were many events leading to the day when the licenses were
given...
 TRAI had recommended auctioning of spectrum at market rates.
 Raja ignored advice of TRAI, Law Ministry, Finance Ministry and even

the PMO.
 Licenses issued on a first-come-first-served basis
 Cut-off date for applications advanced by a week
 Rules changed after the game had begun.
 One more clinching evidence is that the bidders were asked to give a

bank guarantee of 1600 cr, and the time given to satisfy the clause -
45 mins. Its impossible for even the biggest of the corporate houses
to arrange for such a huge money in just 45 mins. But, the
successful bidders were able to provide the bank guarantee. If they
did not had prior knowledge about the clause, how can they arrange
for it? This proves clear favoritism.
How can you help to stop this scam?
 There are many ways you can help in recovering this scam..
 Sign online petition to Prime Minister of India

 Email to Prime Minister of India ( manmohan@sansad.nic.in)

 Post a card to Prime Minister of India (The Prime Minister of India,

PMO Building, South Block,

Raisina Hill, New Delhi - 110101)
 Send one rupee money order to Prime Minister of India. The Money

Order will cost Rs.2.25 (Re.1 + Re.1 as MO fee and Rs.0.25 for the
MO form), and has the added advantage of someone in PMO having
to acknowledge it.
 Join & Spread awareness about 'Cancel 2G Spectrum Licenses'

Campaign on Facebook, Twitter and Orkut communities.

 Get involved in the various anti-corruption campaigns by any of the

NGO within your reach.

 After all this, most of you might be thinking that I am just an

individual and I am not going to make a difference to the system.

But, just recollect some of your history lessons -
 "Never doubt that a small group of thoughtful, committed people

can change the world. Indeed, it is the only thing that ever has." --
Margaret Mead
Shahid Usman Balwa
 (born 1974)
 Entrepreneur

 Mumbai
 Managing Director of Mumbai-based
DB Group
 He is ranked by Forbes as India's 50th richest
man.[2]
Early life
 Shahid Balwa hails from the Chilya
Sunni Muslim community, his forefathers
were from Gujarat, he dropped out of college
and entered the family's hotel business. His
father, Usman, started Balwa's restaurant at
Marines Lines and Balwa's Hotel at Mumbai
Central.[3]
Career

 Balwa dropped out of college and entered the

family's hotel business. His father, Usman, started
Balwa's restaurant at Marines Lines and Balwa's Hotel
at Mumbai Central. He partnered with billionaire real
estate developer Vinod Goenka to form DB Realty in
2006. In a few years, the construction company
claimed to have 21 million square feet of saleable
area in ongoing projects and another 40 million
square feet in upcoming projects.
 The Forbes list has Balwa as India's 66th richest man

with a net worth of US $1.06 billion.

2G spectrum scam

 Balwa was arrested in February 2011 for his alleged

involvement in the 2G spectrum scam through his
company Swan Telecom.[1][8][9] Following the $39 billion
2G spectrum scam, home ministry raised objections
based largely on security concerns. The MHA had
pointed out four issues that needed to be resolved
before allowing the company to come into Etisalat DB, a
company that got scarce 2G spectrum at allegedly
throwaway prices, one of them being Shahid Balwa
should not be involved in the operations of the company
in any capacity, because of his connections with
underworld don Dawood Ibrahim.[10]
Real-estate scam

 Shahid Balwa's DB Realty allegedly usurped 13,837

square meter of prime land in Mumbai from the
Wakf Board, and later built multi-storey towers of
flats worth hundreds of crores of rupees (millions
of dollars). On October 1, 2009, a case was finally
registered against Shahid Balwa, the managing
director of DB Realty under Section 420 of the IPC
for cheating and dishonestly inducing delivery of
property, Section 406 for criminal breach of trust,
Section 468 forgery and Sections 504, 506 and
120 (B) of the IPC. The probe is still on.[11]