Second Indian minister under investigation in telecom scam

A former telecom minister, A. Raja, is already in jail in connection with a scam

India's top investigation agency, Central Bureau of Investigation, told the country's Supreme Court on Wednesday that it is investigating another former telecom minister, Dayanidhi Maran, in connection with alleged irregularities in the working of the communications ministry.

Maran, who was telecom minister between 2004 and 2007, is alleged by the CBI to have coerced the promoter of mobile operator Aircel to sell his stake to Maxis Communications in Malaysia, by delaying clearances of spectrum to Aircel, according to local newspaper reports.

His successor, A. Raja, was arrested in February after the CBI charged him with involvement in the alleged out-of-turn allotment of 2G licenses and spectrum in 2008.

The Supreme Court had instructed the CBI to broaden the scope of its investigation from the out-of-turn allocations in 2008, to also include the allotment of licenses and policy changes by the telecom ministry from 2001.

Maran, who is currently minister for textiles in the federal government, has previously denied the charges against him.

The latest investigation by the CBI into Maran suggests that the irregularities in the telecom ministry may have preceded the 2008 scam.

The irregular allocations of 2G licenses and spectrum to some Indian operators in 2008 may have cost the country about US$39 billion, according to a report by the Comptroller and Auditor General of India (CAG) that was presented to Parliament in November.

The 2G licenses were issued in 2008 at prices that prevailed in 2001, the CAG said. Department of Telecommunications (DOT) went ahead and issued the licenses in 2008 without an auction, even though other government agencies such as the Ministry of Finance had asked it to review the decision, it added.

Some of the alleged beneficiaries of the 2008 allotment, mainly real-estate companies, sold stakes in their mobile ventures to multinational mobile operators like Telenor and Etisalat at prices much higher than they had paid to DOT for licenses and spectrum.

Maran and Raja both belong to the Dravida Munnettra Kazhagam, a coalition partner of the ruling Congress party in the federal government. Another top leader of the party, Kanimozhi Karunanidhi, was arrested in May.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

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