SC Verdict

New Delhi: The Supreme Court has cancelled 122 licenses for mobile networks issued during A Raja's tenure as Telecom Minister. The decision is likely to send India Inc into a seizure and impact foreign investor confidence. The verdict today impacts huge telecom players like Unitech Wireless, Aircel and Idea. The Supreme Court has asked the telecom regulator TRAI to make fresh recommendations for how 2G licenses should be allotted and said there should be fresh allotment through auction within four months.

Six telecom firms have been fined. Two of them, Etisalat and Uninor, have been penalized Rs. five crore each. Loop and Essar have been fined Rs. 50 lakhs each.

In another verdict, the Supreme Court has refused to order the CBI to investigate the role of Home Minister P Chidambaram in the telecom scam allegedly engineered by A Raja. The court said the decision will be taken by Judge OP Saini, who is handling the trial of the telecom scam, within two weeks. Judge Saini is also expected on Saturday to rule on another petition on whether Mr Chidambaram should be made a co-accused in the scam.

The Supreme Court, in a third important judgement this morning, refused to sanction a Special Investigation Team to over-see the CBI's inquiry on the telecom scam. It said the Central Vigilance Commission (CVC) would monitor the investigation instead - the court asked the CBI to submit status reports to the CVC in sealed envelopes.

The government is in a huddle. Telecom Minister Kapil Sibal will meet the Prime Minister shortly and a Group of Ministers meeting has been called this afternoon.

While cancelling the 2G licenses that were issued by Mr Raja, the Supreme Court said they had been allotted in "an unconstitutional and arbitrary manner." Some companies who got the licenses were allegedly ineligible. Others like Aircel have been faulted for failing to meet their roll-out obligations - they are not offering their services they are contractually obliged to in the different areas or circles assigned to their licenses.

The verdicts today are based on petitions by Janata Party President Subramanian Swamy and lawyer-activist Prashant Bhushan. Mr Swamy, like opposition parties, says that Mr Chidambaram was aware of Mr Raja's elaborate ruse, and sanctioned the decisions that led to the swindle.

In 2008, Mr Raja ignored advice to hold an auction for licenses and spectrum. Instead, he followed a first-come-first-serve policy. But he twisted the guidelines so that companies who he allegedly colluded with jumped to the head of the queue and won licenses out of turn. They paid a pittance - the rates used in 2008 were based on the prices of 2001, even though India had many more mobile phone users by then. 122 licenses were issued. Mr Bhushan's petition asked for these to be cancelled.

In recent months, the Attorney General and the government's auditor have said the same. Some of the companies that won licenses have foreign partners. In fact, Unitech Wireless and Swan Telecom entered collaborations with Norway-based Telenor and Dubai-based Etisalat, earning huge investments. Technically, they diluted equity and did not sell their stake - laws at the time forbade those who bought licenses from selling them straight away to others. But the transactions, though legal, unveiled the ways in which the government had been shortchanged. If foreign partners were willing to pay such vast amounts for their share, clearly the telecom licenses had been undervalued. And private firms had been allowed to earn huge profits at the government's expense.

In the Supreme Court, Mr Swamy contended that Mr Chidambaram deserves to be questioned by the CBI for failing to reign in Mr Raja. The basis of Mr Swamy's petition lies in a note from the Finance Ministry that finds that Mr Chidambaram, as Finance Minister in 2008 when the scam unfolded, did not act rigorously enough to ensure that the spectrum was sold at fair prices.

The CBI has, in the past, objected to this, stating that there is nothing to suggest that Mr Chidambaram could have acted differently, and that it is incorrect to single out a minister as culpable for Mr Raja's actions. The government's stand in court is that a lower court is already hearing a petition by Mr Swamy seeking to make Mr Chidambaram a co-accused in the case and therefore that court should decide whether the Union Minister should be investigated or not.

The government has so far backed Mr Chidambaram vociferously, with the Prime Minister stating that the Home Minister enjoys his "complete confidence."

Read more at: http://www.ndtv.com/article/india/supreme-court-cancels-122-telecom-licenses-trial-court-to-decide-on-cbi-probe-for-chidambaram-172521?pfrom=home-bigstory&cp