On 21st December, 2017, 2G spectrum scam verdict came in which the special CBI judge OP Saini has acquitted all accused in the 2G spectrum allocation case pronounced the judgment saying that the prosecution has “failed to prove charges beyond reasonable doubt”.
Fifteen other accused in the case and three telecom companies Swan Telecom Pvt Ltd (STPL), Reliance Telecom Ltd and Unitech Wireless (Tamil Nadu) Ltd are also acquitted. The prosecution had examined 153 witnesses in this case, including the chairman of the Anil Dhirubhai Ambani Group, Anil Ambani, his wife Tina Ambani and corporate lobbyist Nira Radia.
The CBI had alleged that there was a loss of Rs 30,984 crore to the exchequer in allocation of 122 licences for 2G spectrum when a charge sheet filed in April 2011 against Raja and others, which were scrapped by the Supreme Court on February 2, 2012. All the accused had denied allegations levelled against them by the CBI and the ED.
DMK’s senior leader Duraimurugan is happy with the verdict and considered the case to be politically motivated one, meant to spoil the image of DMK. However, the BJP leader Subramanian Swamy wants the Government to appeal in high court against acquittals. The 2G scam, first came to light in 2010, when the United Progressive Alliance government was in power. Time magazine had termed the scam to be the biggest abuse of power in the world after the Watergate scandal, that had led to the resignation of United States President Richard Nixon.
Stocks Reaction to the 2G Spectrum Verdict
RCOM is up approximately 10% on 21st December 2017, as a result of the verdict. The stock had zoomed yesterday nearly 36% as the reports came that the National Company Law Tribunal (NCLT) has adjourned the hearing of insolvency petitions filed against Reliance Communications to early next month. RCOM is facing insolvency proceedings, which are filed by lenders such as China Development Bank and Ericsson India before NCLT for the recovery of dues.
The stock moved up approximately 16% after the verdict of the court. National Company Law Tribunal (NCLT) on December 8, had suspended all the eight directors of the company over allegations of mismanagement and misappropriation of funds and had authorised the Centre to appoint its 10 nominees on the board.
Swan Telecom Pvt Ltd (STPL)
Reliance ADA Group had made all fundings for Swan Telecom Pvt Ltd through a “circuitous route” when STPL had applied for 2G licences in 14 telecom circles across the country. The Fund were invested by Tiger Traders in equity of Swan Telecom were considered ultimately sourced from ADAE Venture. The prosecutor had further submitted that STPL was Reliance ADAG’s group company. However, Reliance ADAG had denied the allegation saying that he does not know the company STPL. The stock is not trading.
The investigating agencies and prosecuting agencies should look at the verdict and decide what to do further in the matter. The Congress should not consider this as some kind of clean chit. Stocks under impact will definitely enjoy the verdict for the time being.