2G verdict may see host of telcos suing Centre

22 Dec 2017

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The special court's verdict in the 2G spectrum 'scam' acquitting all the 19 accused on Thursday may prompt the telecommunication companies, which were alleged to be involved in wrongdoing to seek compensation from the government, reports today said.

In 2012, the Supreme Court had cancelled 122 2G spectrum licences granted by former telecom minister Andimuthu Raja on the ground that they were issued in a "totally arbitrary and unconstitutional" manner (See: SC cancels all 2G licences, orders fresh spectrum auction). The 122 licences were granted by Raja for something Rs9,000 crore, while 3G auctions for a smaller number of licences subsequently fetched the government Rs69,000 crore.

The then Comptroller and Auditor General of India Vinod Rai had calculated a presumptive loss to the exchequer of up to Rs1.76 lakh crore.

The companies that lost on account of the cancellation of the licences were Uninor (a joint venture between Unitech and Telenor of Norway), Loop Telecom, Sistema Shyam (a JV between Shyam and Sistema of Russia), Etisalat DB (a JV between Swan and Etisalat of the UAE), S Tel, Videocon, Tata Teleservices and Idea.

Among the 122 licences issued by Raja in January 2008 on first-come first-serve basis, Uninor was alloted 22 pan India licences, Loop 21, Sistema-Shyam 21, Etisalat-DB 15, S Tel 6, Videocon 21, Idea nine and Tatas three.

Soon after the 2G verdict on Thursday, Essar Group said in a statement, said, "We are thankful to the court for the judgement as it vindicates our stated position and the court has appreciated / vindicated it."

Special Judge O P Saini, who acquitted all 17 accused including Raja in the main CBI case, holding that there was no scam, also let off Loop Telecom promoters I P Khaitan and Kiran Khaitan saying there was no material on record to indicate that a bogus transaction was carried out for securing 2G licences.

Loop Telecom, which had paid Rs1,658 crore as licence fee for spectrum in 22 circles, had earlier moved Telecom Dispute Settlement Authority (TDSAT) seeking a refund of the amount and also Rs1,000 crore in damages, says a report in the Business Standard.

A report in The Economic Times citing sources has said that the company is likely to restart the overseas arbitration proceedings and also the case before the TDSAT started seeking damages of about $1.5 billion.

Accordiing to the BS report quoting lawyers involved in the 2G scam case, other global companies such as Telenor and Etisalat could also go for arbitration.

"We see a lot of foreign telecos taking the arbitration route under bilateral investment treaties after Thursday's judgment," a lawyer has been quoted as saying.

The unon government is thus likely to see a huge bill coming its way, though the whole process is likely to be long drawn out.

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