India investigates irregularities in 2G spectrum allocation

India's Central Bureau of Investigation (CBI) raided the offices of Vodafone India and Bharti Airtel as well as the homes of former ministers over the weekend as part of investigations concerning irregularities in the allocation of spectrum from 2001 to 2007.

In a statement released Saturday, CBI said it was investigating allegations that two former public servants "entered into a criminal conspiracy" with three private companies based in New Delhi and Mumbai. With the approval from then-minister of telecom, the officials made a decision on Jan. 31, 2002, to allocate additional spectrum to the companies, violating recommendations in a report issued by a technical committee.

The companies were charged spectrum fees at a rate that was cheaper than what was applicable then, said CBI. Instead of the incremental 1 percent AGR (adjusted gross revenue) for spectrum beyond 6.2MHz and the incremental 2 percent for spectrum beyond 8MHz, the companies paid fees of 1 percent AGR for spectrum from 6.2 to 10MHz.

A spokesperson for CBI told The Wall Street Journal that it was searching the offices of Bharti Airtel and Vodafone India, according to a report on Sunday. Both telcos confirmed the searches took place.

A separate Bloomberg Businessweek report quoted CBI spokesperson, Dharini Mishra, to say the homes of Shyamal Ghosh, the federal government's telecom secretary from 2001 to 2002, and J.R. Gupta, then-director of state-owned telecom company Bharat Sanchar Nigam, were also searched.