IT Business
Leading Indian mobile operators under investigation in $39bn scandal
Vodafone India and Bharti Airtel charged with irregular allotment of spectrum
By John Ribeiro | IDG News Service | Published 15:46, 21 November 11
India's top investigation agency has registered a case against two major Indian mobile operators and former government officials in connection with alleged irregularities in the allocation of additional 2G spectrum in January 2002, widening the scope of its investigations into alleged scams in India's telecom sector.
The offices of the two mobile operators, Bharti Airtel, India's largest mobile operator, and Vodafone India, were also raided by the Central Bureau of Investigation (CBI) on Saturday, according to sources.
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Vodafone confirmed in a statement that CBI officials had visited the company's offices in Mumbai and Delhi "seeking information related to the spectrum allocation to operators during 2001-02." Airtel was not immediately available for comment.
Corruption
The CBI has been investigating the alleged irregular allocation of spectrum and licences by the government in 2008, which has led to the arrest of a former communications minister Andimuthu Raja, a member of Parliament, business executives, and government officials.
The new investigations into Vodafone and Bharti Airtel is an offshoot of a Supreme Court order to the CBI that it should also investigate for irregularities in spectrum allocation from 2001 to 2007.
The CBI said on Saturday that it had filed a case under the Indian Penal Code and the Prevention of Corruption Act against the companies and government officials. It said it had not filed a case against the minister for communications at the time, Pramod Mahajan, as he is deceased.
$39 billion scandal
The investigation in the 2008 spectrum and licence allocations has proven to be an embarrassment to India's Prime Minister Manmohan Singh, and the ruling United Progressive Alliance coalition. The CBI also registered a case in October against another former communications minister, Dayanidhi Maran (top image) on charges that he coerced the promoter of mobile operator Aircel to sell his stake to a company in Malaysia, by delaying clearance of spectrum.
The new investigations may however drag in the opposition Bharatiya Janata Party and its coalition partners who were in power in 2002.
The irregular allocations of 2G licenses and spectrum to some Indian operators in 2008, without an auction, may have cost the country about $39 billion, according to a report by the Comptroller and Auditor General of India (CAG). The report alleged that a "first come, first served" rule was manipulated to favour some companies, and was ranked by TIME magazine earlier this year as the second biggest abuse of power ever behind the Watergate scandal.
Both Vodafone and Bharti Airtel have claimed that they were in compliance with regulations, and are cooperating with the investigations. CBI said further investigation in the case is in progress.
