India’s 2G scandal accused are acquitted

An Indian court cleared several high profile politicians and business leaders of charges of money laundering and corruption related to the granting of 2G telecoms spectrum licences in 2008, one of the country’s largest corporate scandals.

The Central Bureau of Investigation special court acquitted politicians – including former telecoms minister A Raja – and corporate leaders on the grounds of insufficient evidence as the prosecution “miserably failed” to prove charges of wrongdoing, according to the presiding judge, OP Saini.

Mr Raja was accused of conspiring with officials from telecoms companies to award spectrum licences at prices below market value in return for kickbacks.

The alleged corruption scandal was believed by the comptroller and auditor general of India to have cost the country’s economy up to US$40 billion (Dh147bn) in losses.

Following the corruption case, the Supreme Court cancelled all 122 telecom licences in 2012, forcing some of the foreign telecoms operators to exit the Indian market. A Raja spent more than a year in jail before being released.

The scandal also had a significant impact on the reputation of the then ruling Congress party, which lost to the BJP in the following elections in 2014.

Politician M Kanimozhi, Swan Telecom promoter Shahid Balwa, Bollywood producer Karim Morani, as well as Indian telecoms giant Reliance Telecom were among those cleared in yesterday’s verdict.

“There was no wrongdoing on my part or on the part of my companies,” said Sanjay Chandra, the managing director of Unitech, who was among those acquitted.

But the damage sustained continues to affect the health and financial status of his company, which is paying the price for this case having been “foisted on us fraudulently and without any basis”, he said.

Norway’s Telenor was among the overseas operators impacted by the case through its joint venture in India.

The UAE’s Etisalat also inadvertently became embroiled in the case after it bought a stake in Swan Telecom in 2009. Swan had already acquired the 2G licence a year prior to Etisalat’s investment into the company, but Etisalat had to exit the market when the licences were cancelled. An Etisalat spokesman did not respond to a request for comment on the verdict.

India is one of the world’s fastest growing telecom markets, recently overtaking the US to become the second largest smartphone market after China, according to technology industry analysis firm Canalys.

The scandal ultimately resulted in a massive upheaval in India’s telecom sector, which has also been impacted by intensifying competition between operators.

There are just a handful of major players left in the sector now.