Chapter 20

Recent scandals in the subcontinent

Integrity without knowledge is weak and useless, and knowledge without integrity is dangerous and dreadful.

Samuel Johnson (1709–1784)

1. THE GREAT INDIAN TELECOMS FRAUD

Current (2011) estimates are that this scandal has cost the Indian taxpayer something in the region of £25 billion, making it one of the largest known frauds in history and certainly the largest of the 21st century to date. Investigations continuing today are looking at the granting of telecoms licences in India between 2001 and 2008.

Case background

In 2001, the Indian Government decided to change and modernise its approach to the granting of telecoms licences, in recognition of the rapid growth in mobile phone technology. At the time, India had only just started the spread of mobile networks and the auction prices for the various geographical areas reflected that. Over the years, the sector expanded increasingly rapidly and when the expiry period for the original licences approached in 2007, the market was now worth exponentially more than it had been in 2001.

The Indian Government advertised for bidders for the 2007 licences to provide mobile phone services under the newest 2G standard. Bidders were given until 1 October 2007 to submit their bids. However, at the last moment, the Government abruptly announced that the bidding process had closed at the end of the day on 25 September. All bids received between 26 September and 1 October were now excluded from the ...

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