Sunday 24 July 2011

Editor's Choice: 2G scam & Admiral Gorshkov submarine deal connection




One of the allegations against A. Raja in the 2g scam case is setting-up an arbitrary cut off date of 1st October 2007 and then its revision to 25th September 2007 for grant of telecom licenses in 2007-08.
There are many questions on which CBI has failed to investigate or it has been asked not to investigate - (a) What was the reason for having a cut off date and even revision of this date? (b) Why only 25th September as the cut off date and why not, any other date? (c) Who applied on the revised cut off date?
Interestingly, CBI is keeping its mind and eye closed on these questions. It is Sistema Shyam and Indiabulls which applied on 25th September 2007. Of course, Indiabulls cannot be a company for which cut off date was revised back to 25th September because it was not a successful applicant. But, what about Sistema Shyam - was its role investigated by CBI in the 2g scam case? If yes, to what extent?
FIRSTLY, WHO IS SISTEMA
Sistema is the largest diversified public financial corporation in Russia and the CIS, which invests in and is a major shareholder of companies serving over 100 million customers in the sectors of telecommunications, high technology, oil and energy, radars and aerospace, banking, retail, mass-media, tourism and healthcare services. It reported revenues of US$ 7.8 billion for 1st quarter of 2011, and total assets of US$ 46 billion as at 31st March 2011.
SECONDLY, WHAT IS THE RELEVANCE OF 25TH SEPTEMBER 2007
Shyam Telelink applied for licenses in 21 circles on 25th September 2007 (date on which the first cut off date was announced and subsequently, this date was announced as revised cut off date). On the very next day, on 26th September 2007, Sistema announced that it has acquired a 10% stake in Shyam Telelink for a cash consideration of US$ 11.4 million. This deal might not have happened within 1 day of applying for telecom licenses. Why it was announced a day after applying for telecom licenses? Why did such a large company (Sistema) invest in a company (Shyam Telelink) which has got license in only 1 circle (Rajasthan)? If it was serious about Shyam Telelink, why had it not straight-away acquired 49% stake (which does not require any approval)?
Truth is, Sistema is closely connected to the Russian Government. It is doing business in oil and gas also with the Government of India. It is believed that during the Admiral Gorshkov submarine deal discussion, when Defence minister A. K. Antony visited Moscow from 17-19 October 2007, the Russian government asked the Indian Government (PMO) to request Telecom minister to accommodate Sistema and hence the 25th September 2007 was finalised as revised cut off date. Any prior cut off date would have sent Sistema applications for 21 licenses to non-consideration zone like the other 343 applications pending till date with DOT. This belief is confirmed from the fact that Sistema signed the share purchase agreement to increase its stake in Shyam Telelink from 10% to 51% in October 2007 - only after getting an assurance from the Indian government that the telecom licenses will be issued to Shyam Telelink. Otherwise, what was the reason for not signing this agreement in September 2007 when Sistema acquired 10% stake in Shyam Telelink
THIRDLY, WHY WAS SISTEMA SO IMPORTANT FOR THE INDIAN GOVERNMENT -
Ministry of External Affairs (Annual Report 2007-2008) - “The strategic partnership between India and Russia was further consolidated during the year (2007-2008) through exchange of high-level visits and signing of documents, particularly in the fields of defence, space, science and technology, economic cooperation, counter-narcotics and culture.”
To understand this influence of Russia over India more correctly, let’s go through some major events on and around the date when Sistema decided to enter into Indian telecom market and till the date of issuance of licenses to Sistema Shyam:
On 25-26 January 2007, Mr. Vladimir V Putin, Russia President visited India. Russian billionaire tycoon and chairman of Sistema - Vladimir Yevtushenkov - also accompanied him with an eye on Indian telecom sector. During this visit, a Protocol was signed with the Russian Government on holding “Year of Russia in India” in 2008 and “Year of India in Russia” in 2009.
Subsequently, many more visits and meetings were held between Russian and Indian government officials, like-
  1. February 14, 2007 - Fifth Trilateral meeting of Foreign Ministers of India, China and Russian Federation.
  2. 9 April 2007 - Foreign Office Consultations between the Foreign Secretary and the Russian First Deputy Foreign Minister, Andrei Denisov took place in Delhi.
  3. 6-8 June 2007 - Prime Minister Dr Manmohan Singh briefly met President Putin at the Summit of G-8 and Outreach countries in Heiligendamm, Germany.
  4. 9-10 June 2007 - Minister of Commerce and Industry, Kamal Nath visited St. Petersburg to participate in the St. Petersburg Economic Forum.
  5. July 2007 - Joint Study Group set up in 2006 to find ways and means to increase bilateral trade and investment and examine feasibility of a Comprehensive Economic Cooperation Agreement finalized its Report during its fourth meeting in Moscow.
  6. 1 August 2007 - Minister of External Affairs met Russian Foreign Minister Sergei Lavrov on the sidelines of the ARF/ASEAN/EAS meeting in Manila.
  7. 13-14 August 2007 - Special Envoy of Prime Minister, Shyam Saran visited Moscow.
  8. 28-29 August 2007 - National Security Adviser, M.K. Narayanan visited Moscow.
  9. August 2007 - Department of Science and Technology of India and the Russian Foundation of Basic Research, Moscow signed a Memorandum of Understanding (MoU) on cooperation in basic sciences.
  10. August-October 2007 - The five Joint Working Groups under the Inter-Governmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation: (i) Trade and Economy (ii) Energy (iii) Metallurgy and Mining (iv) Technology and (v) Tourism and Culture discussed cooperation in their respective fields in Moscow.
  11. 7-10 October 2007 - President of the Indian Council for Cultural Relations, Dr. Karan Singh visited Moscow to discuss cultural cooperation, particularly preparations for ‘Year of Russia in India’ in 2008 & ‘Year of India in Russia’ in 2009.
  12. 11-13 October 2007 - Minister of External Affairs, Pranab Mukherjee visited Moscow to cochair the 13th session of the India-Russia Inter-Governmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation (IRIGC).
  13. 24 October 2007 - Minister of External Affairs had a bilateral meeting with the Foreign Minister of Russia, Sergei Lavrov on the sidelines of the India-Russia-China Trilateral Foreign Ministers meeting held in Harbin, China.
  14. October 2007 - The Joint Task Force on Mutual Financial Obligations met in Moscow and the Sub-Group on Banking met in Jaipur.
  15. 28 October-1 November 2007 - Acting Secretary of the Security Council of Russia, Gen. Valentin Sobolev visited India.
  16. November 11-12, 2007 - Prime Minister, Dr. Manmohan Singh visited Moscow and held delegation-level talks with the President of Russia, Vladimir Putin. He also met the Prime Minister of Russia, Viktor Zubkov and attended a business meeting with senior Indian and Russian trade and industry representatives. Many documents were signed during the visit, including Letters of Exchange (on utilization of Rupee debt funds for Russian investments in India).
Why suddenly, were there so many visits to Moscow and so many crucial meetings after January 2007 when Sistema desired to enter the Indian telecom market? What was the need of signing protocol on holding 2008 as “Year of Russia in India”? Had such a protocol has been signed with any other country?
In January 2008, Sistema guaranteed USD 520 million of total USD 630 million (82.5% of total amount) to be paid for obtaining the licences by Shyam Telelink despite having a shareholding of 10%. Subsequently, in the same month on 18th January 2008, Sistema increased its shareholding in Shyam Telelink from 10% to 51% (for which share purchase agreement was signed in October 2007). It shows that Sistema had been assured in October 2007 itself that Shyam Telelink will be issued licenses in 21 circles for which application was filed on 25th September 2007 - otherwise, why was the share purchase agreement signed in October 2007, and why not in September 2007 when it acquired 10% shareholding in Shyam Telelink.
In February 2008, Sistema said that it would increase its stake in Indian telecom operator Shyam Telelink from 51% to 74% in the next 1-2 years. Why had it not acquired 74% stake in the first instance when it had got FIPB approval for 51% stake? Sistema also spoke about investment of USD 4-7 billion to roll out a pan-Indian network. Why was such a large investment committed by Sistema when it was holding just 51% stake? Was a proportionate amount committed by the other shareholder holding 49% stake or was this 49% shareholder just acting as a nominee of Sistema? This presumption becomes a reality when on 6th June 2008, Sistema increased its stake in Shyam Telelink from 51% to 74%.
On February 12-13, 2008, Prime Minister of the Russian Federation, Viktor Zubkov, accompanied by a large business delegation, visited India. He participated in the Second India-Russia Forum on Trade and Investment and inaugurated the ‘Year of Russia’ in India in 2008 and took part in the opening of the Delhi representation of Russian largest financial corporation "Sistema". He said that "Sistema" is a pioneer in high-tech and telecommunications field in India. Facing tough competition, this company, first of all, established a strong foothold in the Indian market and recently “managed” to obtain a license, which allows "Sistema" to carry out pan-Indian telecom operations.
Just a day before the visit of Victor Zubkov to India, an agreement on expanding peaceful nuclear cooperation with India was initiated. This shows the influence of Russia on the Indian government. Could the Indian Government have afforded to annoy its Russian counterpart by fixing any date prior to 25th September 2007 as the revised cut off date?
Even today also, Russian government is using its influence over the Indian government to ensure that Sistema Shyam is kept out of investigation zone and they have got assurance from the Indian government. It is apparent from the fact that prior to filing of first chargesheet by CBI, UAE government officials met with the Indian government and Norway Prime Minister wrote a letter to Indian Prime Minister, expressing their concern over ongoing investigations and to protect their investment in India. But, no such formal visit or communication was made by the Russian government. What it means is that either it is not concerned about its investment in India (which is difficult to believe) or it has got assurance from the Indian government that there will be no action against Sistema Shyam (which is most likely the case considering influence of the Russian government over Indian government).
This shows how the government of our country can control the investigation agencies and commit fraud with us - the citizens of this country.
Respected Prime Minister, can we expect a CBI investigation directed by you vis-a-v-s the 2g scam case towards Systema Shyam?
(Data Source: Annual Report 2007-2008 issued by the Ministry of External Affairs and media reports)
 
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Most Corruption In India


An Indian political scandal commonly refers to some action by a politician deemed unacceptable in law or by custom, or which is held to be morally unacceptable to the politician's peers or the electorate. In almost all Indian political scandals, the politicians are not prosecuted.

2G Spectrum Scam By Raja as Telecom Minister :

Corruption In India 2g spectrum scam raja telecom minister
The 2G spectrum scam involved officials and ministers in the Government of India illegally undercharging mobile telephony companies for frequency allocation licenses, which they would use to create 2G subscriptions for cell phones. According to a report submitted by the Comptroller and Auditor General based on money collected from 3G licenses, the loss to the exchequer was Rs 176,379 crore (US $ 39.16 billion). The issuing of the 2G licenses occurred in 2008, but the scam came to public notice when the Indian Income Tax Department investigated political lobbyist Niira Radia and the Supreme Court of India took Subramaniam Swamy's complaints on record 

Former Telecom Minister of the NDA government Arun Shourie was the whistleblower who helped uncover the scam and also exposed many loopholes in the UPA government's policy towards issuing telecom licences.

In 2008, the Income Tax department, after orders from the ministry of Home and the PMO, began tapping the phones of Nira Radia. This was done to help with an ongoing investigation into a case where it was alleged that Niira Radia had acted as a spy.


Some of the many conversations recorded over 300 days were leaked to the media. The intense controversy around the leaked tapes became known in the media as the Radia tapes controversy. The tapes featured some conversations between politicians, journalists and corporatation. Politicians like Karunanidhi, journalists like Barkha Dutt and Vir Sanghvi and industrial groups like the Tata Group were either participants or mentioned in these tapes.

More Detail : 2G spectrum scam


Adarsh scam By Ashok Chavan :

In 2010, the Indian media brought to public the violations of rules at various phases of construction in the Adarsh Society. Questions were raised on the manner in which apartments in the building were allocated to bureaucrats, politicians and army personnel who had nothing to do with Kargil War and the way in which clearances were obtained for the construction of the building of the Adarsh Society. The Adarsh society high-rise was constructed in the posh Colaba locality of Mumbai, which is considered a sensitive coastal area by the Indian Defence forces and houses various Indian Defense establishments. The society is also alleged to have violated the Indian environment ministry rules. Many activists like Medha Patkar had been trying to uncover this scam since a long time. The exposure of the infamous nexus between politicians, bureaucrats and builders in this scam is said to be only the tip of the iceberg. It had led to resignation of the then Chief Minister, Ashok Chavan.

Several inquiries have been ordered by the army and the Government to probe into the irregularities. Some of the current occupants of the flats in the Adarsh co-operative society building have offered to vacate their flats at the earliest, denying allegations that they were alloted flats because they influenced or helped, in some manner, the construction of the society by violating the rules. The media also exposed that the lower house of the Indian Parliament was misled by one of the bureaucrats, Pradeep Vyas, involved.

The environment minister Jairam Ramesh formally set the ball rolling for the demolition of the entire 31-story scam-tainted Adarsh building in Coloba's eco-sensitive zone on Friday November 12, 2010. The environment minister is said to have sent a show cause notice to the Adarsh housing society. The environment minister is said to have stated that "all options under the law are open except regularization of the structure". As per the Ministry of Environment and Forests' order dated 16 Jan 2011, 'the unauthorised structure should be removed in its entirety and the area restored to its original condition'.

List Of Flat owners : Click Here


2010 Commonwealth Games Controversy By suresh kalmadi :

A number of concerns and controversies surfaced before the 2010 Commonwealth Games in New Delhi, India, which received widespread media coverage both in India (the host nation) and internationally.


The Commonwealth Games was severely criticised by several prominent Indian politicians and social activists because billions of dollars have been spent on the sporting event despite the fact that India has one of the world's largest concentration of poor people. Additionally, several other problems related to the 2010 Commonwealth Games have been highlighted by Indian investigative agencies and media outlets; these include — serious corruption by officials of the Games' Organising Committee, delays in the construction of main Games' venues, infrastructural compromise, possibility of a terrorist attack, and exceptionally poor ticket sales before the event.

The day after the conclusion of the Games, the Indian Government announced the formation of a special committee to probe the allegations of corruption and mismanagement against the Organizing Committee. The probe committee will be led by former Comptroller and Auditor General of India VK Shungloo. This probe will be in addition to the Central Bureau of Investigation, Enforcement Directorate, and Central Vigilance Commission investigations already underway. The Prime Minister of India, Dr. Manmohan Singh, had promised in mid-August, when reports of the bungling first surfaced, that corrupt officials will be given "severe and exemplary" punishment after the Games. The committee has been given three months time to submit its report.

More Detail : 2010 Commonwealth Games Controversy




Indian stock market manipulation scam By Ketan Parekh : 

Ketan Parekh is a former stock broker from Mumbai, India, who was convicted in 2008, for involvement in the Indian stock market manipulation scam in late 1999-2001. Currently he has been debarred from trading in the Indian stock exchanges till 2017.

On 9th Dec 2010, NDTV India (a news channel of india) claims that Ketan Parekh has relation with Ravi inder (arrested by Delhi police in November 2010).  According to the news channel he still has a vital role in indian share market.
A chartered accountant by training, Parekh came from a family of brokers, which helped him create a trading ring of his own. Between 1999 and 2000, as the technology bubble was engulfing the rest of the world, the stock market in India sprang to life too.

Be it investment firms, mostly controlled by promoters of listed companies, overseas corporate bodies or cooperative banks, all were ready to hand the money to Parekh, which he used to rig up stock prices by making his interest apparent. In no time, scrips like Visualsoft rose from Rs 625 to Rs 8,448 per share and Sonata Software from Rs 90 to Rs 2,150. But the vicious cycle of fraud did not end with price rigging. The inflated stocks had to be dumped onto someone in the end, for which Parekh used financial institutions like the UTI. But the party ended rather abruptly a day after the Union Budget was presented in February 2001. A bear cartel started disrupting Parekh's party by hammering prices of the K-10 stocks, precipitating a payment crisis in Kolkata.

As SEBI investigated, it was evident that bank and promoter funds were used to rig the markets. Parekh was arrested in March that year and was in custody for 53 days. In the aftermath of the scam, many gaping loopholes in the market were plugged. The trading cycle was now reduced from one week to one day. Badla was banned and operators could not carry forward trade in its primitive form. Forward trading was formally introduced in the form of exchange-traded derivatives to ensure a well-regulated futures market. Broker control over stock exchanges was demolished. It's perhaps thanks to the Pentafour Bull that India's stock markets are today considered safe. And to his credit, Parekh forced lethargic policy-makers to institute reforms in the financial system. He is, however, now suspected to be operating in the markets through conduits. Parekh will remain a work-in-progress for regulators.

More Detail: Ketan Parekh Scam


Barak Missile scandal By Samata Party :

The Barak Missile Scandal is a case of defence corruption relating to the purchase of Barak Missile Systems by India from Israel. The case is currently under investigation by the Central Bureau of Investigation, and several people including the Samata Party ex-treasurer R.K. Jain have been arrested. Others named in the First Information Report include politicians George Fernandes and Jaya Jaitley, and arms dealer and ex-naval officer Suresh Nanda, who is the son of retired chief of naval staff S.M. Nanda.

The Barak missile system (jointly developed by Israel Aircraft Industries (IAI) and RAFAEL Armament Development Authority of Israel) employs vertically launched missiles to counter anti-ship sea-skimming missiles and attacks by aircraft. On October 23, 2000, contracts had been signed by the Indian government to procure seven Barak systems at a total cost $199.50 million and 200 missiles at a cost of $69.13 million. This was done despite objections raised by several groups, including members of the team that had originally visited Israel to observe the missile performance, and APJ Abdul Kalam, then heading the Defence Research Development Organization. Though some of the objections are of a procedural nature, the Navy Chief of Staff Sushil Kumar is currently under investigation as to why these objections were not considered.

More Detail: Barak Missile scandal


Stamp Paper Scandal By Abdul Kareem Telgi :


Abdul Kareem Telgi began printing fake stamp paper. He appointed 300 people as agents who sold the fakes to bulk purchasers, including banks, FIs, insurance companies, and share-broking firms. His monthly profits have been estimated as being in the neighbourhood of Rs 202 crore (slightly more than US $40 million).

The size of the scam was estimated to be more than Rs 43,000 crore (US$ 9.55 billion).

The Telgi case brought corruption in the Karnataka police force to light, causing a national scandal in India. A videotape emerged in September 2006 of Abdul Karim Telgi taking a Narco Analysis test. Under the influence of the supposed truth serum, Telgi is said to have blurted out the names of Nationalist Congress Party leaders Sharad Pawar and Chaggan Bhujbal. Pawar has never been publicly linked to the case, but was forced to go public with a denial.

On 17 January 2006, Telgi and several associates were sentenced to ten years' rigorous imprisonment.

On June 28, 2007 Telgi was sentenced to rigorous imprisonment  for 13 years and fined a whopping Rs 202 crore on various counts in one of the main cases of the scandal. Hours after Telgi pleaded guilty and repented his actions, Judge Chitra Bedi of a special court pronounced the quantum of punishment under various sections of the IPC and the Maharashtra Control of Organised Crimes Act. This is the harshest punishment given to Telgi in any of the fake stamp paper cases he has been convicted for so far in Maharashtra and Karnataka. Honorable Judge Chitra Bedi observed that she had taken a "lenient view" since Telgi, who is in judicial custody in Pune, had pleaded guilty and also because of his health. Telgi is HIV positive.
Honorable Judge Chitra Bedi sentenced 42 other accused in the case, who too had pleaded guilty, to rigorous impriosnment for up to six years and imposed fines on them. CBI counsel Raja Thakare moved an application in the court seeking the confiscation of Telgi's property to recover the fine slapped on him. Telgi, who broke down earlier in the day while pleading guilty, thanked the judge for "giving him justice."

More Detail: Stamp Paper Scandal


Money laundering and mining scam By Madhu Koda :


On 10th Oct 2009, he was charged with laundering money worth over Rs. 4000 crores. In nationwide raids by the Enforcement Directorate, assets allegedly worth Rs. 4000 crore — almost a fifth of the annual budget of the state he once ruled — were unearthed. Among others, these assets were reported to include hotels and three companies in Mumbai, property in Kolkata, a hotel in Thailand, and a coal mine in Liberia. This alleged scam is said to be the second-largest scam uncovered in India in 2009 and gets his name included in the list of controversial Indian businessman like Hasan Ali Khan and Harshad Mehta. Minister of State for Home Ajay Maken said that the Central Bureau of Investigation (CBI) may be asked to probe this scam, in addition to Enforcement Directorate (ED) and the Income Tax Department. ED is behind his two close associates Mr.Binod Sinha and Mr.Sanjay Chowdhary. Binod is behind bars and Sanjay has escaped to Dubai.
In the probes, it was found that Maoists received a 30% share of the "Koda plunder". This has led to staunch criticism of Koda from sections of society, including the oppostition Bharatiya Janata Party. Gujarat Chief Minister Narendra Modi stated Koda was part of a corrupt network of Congress Party who stole money from Jharkhand.
 
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