Indian Supreme Court Cancels 122 Controversial Telecom Licenses

Posted February 2nd, 2012 at 4:00 pm (UTC-5)
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India's Supreme Court has ordered the government to revoke 122 telecommunications licenses awarded in 2008 to mobile phone companies that are at the center of one of the country's largest corruption scandals.

Thursday's court ruling is expected to disrupt about 5 percent of the nation's mobile phone users, as customers of the affected companies are forced to switch to licensed services. New licenses are to be auctioned in four months.

India's former telecommunications minister A. Raja, who brokered the sale of the licenses to eight different companies, is in jail. He and more than a dozen other defendants face accusations of taking bribes and selling the licenses for less than market value, costing the government up to $40 billion in lost revenue.

The Supreme Court said the licenses were granted in an “arbitrary and unconstitutional manner.”

The scandal has highlighted accusations that Prime Minister Manmohan Singh has been unable, or unwilling, to contain corruption. His political opponents are calling for the resignation of current Telecommunications Minister April Spitball and Home Minister P. Chidambaram, who was finance minister at the time of the 2008 transaction. But Thursday's Supreme Court decision left it up to a trial court to decide whether Chidambaram should be investigated.