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[December 21, 2012]

CBI files charges in older 2G case

NEW DELHI, Dec 22, 2012 (Mint - McClatchy-Tribune Information Services via COMTEX) -- The Central Bureau of Investigation (CBI) named Bharti Airtel Ltd, the country's largest telecom service provider, its closest rival Vodafone India Ltd and former telecom secretary Shyamal Ghosh in the latest charges filed by the agency over alleged wrongdoing in the allocation of spectrum since 2002.

Two Vodafone companies, Hutchinson Max and Sterling Cellular, have also been named in the charges that peg the loss to the exchequer at Rs.847 crore during the tenure of then communications minister Pramod Mahajan, who died in 2006.

This is in addition to the Rs.1.76 trillion crore that the Comptroller and Auditor General of India (CAG) says was the loss to the exchequer in the January 2008 telecom licence and spectrum allocation under then minister A. Raja. The Supreme Court cancelled the spectrum licences that were given in 2008 in February this year, saying the process was flawed.

The latest charges are under section 120-B (criminal conspiracy) of the Indian Penal Code and various provisions of the Prevention of Corruption Act relating to government officials being bribed into abusing their position. The charges were filed in a special CBI court in Delhi presided over by O.P. Saini that's hearing the spectrum case on Friday.

This is the first time CBI is filing charges related to wrongdoing under the National Democratic Alliance (NDA) government led by the Bharatiya Janata Party (BJP). The investigation, originally confined to the 2008 allocation, was subsequently widened to cover such exercises since 2002 at the order of the Supreme Court, thus bringing actions by the current opposition under the scanner. The BJP and other opposition parties have targeted the Congress-led government over a series of corruption allegations during its administration.

On Friday, the CBI lawyer told the court that the company representatives who were in charge of the conspiracy could not be identified. This means the telcos will have to name the representatives who will fight the case, unless the trial court decides to name them.

Bharti and Vodafone declined to comment.

CBI has also accused the companies and individuals of conspiring to allocate and receive the additional spectrum at one percentage point lower than what they should have paid in 2001-03, when Mahajan was communications minister. Ghosh was communications secretary when Mahajan was minister.

The charges referred to "corresponding undue gain to the aforesaid telecom companies including incidental gain to other telecom companies by charging additional 1% (of) AGR (adjusted gross revenue) instead of charging the required additional 2% of the AGR for allocation of additional spectrum from 6.2MHz (megahertz) up to 10MHz".

The CBI lawyer also said J.R. Gupta, deputy director-general in the department of telecommunications (DoT) at that time, would be a witness in the case as he had agreed to give state's evidence. A total of 73 witnesses have been named in the 57-page chargesheet.

The case relates to the allocation of additional spectrum above 6.2MHz to telecom companies under questionable circumstances.

"Investigation has...revealed that Shyamal Ghosh deliberately with malafide intention did not obtain the comments of then member finance who was the representative of (the finance minister) despite the matter having huge financial implications," the chargesheet said. "The wireless adviser who was the custodian of entire spectrum was also intentionally bypassed on flimsy ground that he was retiring on the very day, i.e. 31 January 2002." The agency said the charges related to spectrum in Delhi given on 17 July 2002 to Bharti and Sterling and in Mumbai to Hutchison Max Telecom Ltd.

The government has, at various points of time, said there was no wrondoing in the allocations and that they were made in line with policy.

"There is no violation of licence condition in the allotment of additional spectrum beyond 6.2MHz, as such there is no proposal for recovery of spectrum," then minister of state for communications Gurudas Kamat had said in answer to a question in the Rajya Sabha on 30 July 2009.

Telcos in India pay revenue share in terms of licence fees and spectrum usage charges based on the adjusted gross revenue. This is the total revenue of the company adjusted for money that doesn't accrue to it directly. The case will be considered next on 14 January.

CBI last year registered a case related to irregularities in spectrum allocation during Mahajan's tenure as telecom minister. After registering the case, CBI teams conducted searches at the offices of Bharti Airtel in Gurgaon and of Vodafone in Mumbai and Delhi, besides the homes of Ghosh and Gupta.

In its first information report, CBI alleged that DoT increased the base spectrum for telcos from 4.4MHz to 6.2MHz in 2001-2003, and allocated additional spectrum on subscriber-linked criteria.

Shares of Bharti ended at Rs.307.15, down 3.08% on a day the benchmark Sensex dropped 1.09% to 19,242.00 points.

___ (c)2012 the Mint (New Delhi) Visit the Mint (New Delhi) at www.livemint.com Distributed by MCT Information Services

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