Former Indian telecom minister arrested over $40 bln graft scam

India's former Telecom Minister Andimuthu Raja, his personal secretary RK Chandolia and former telecom secretary Siddharth Behura have been arrested by India's Central Bureau of Investigation (CBI) over his alleged manipulation while allocating the second-generation telecom (2G) spectrum licenses in 2007 and 2008.

The Feb. 2 arrest of the minister is part of a probe launched by the CBI into what is being billed as the country's largest graft scam. The arrest also indicates the government's growing efforts to clean up its image in the wake of a slew of other scams.

The CBI said Raja was arrested due to irregularities in the allocation of mobile licenses and spectrum.

According to the federal agency, Raja and others had conspired and allocated Unified Access Service (UAS) licenses and spectrum to certain companies ahead of others, in violation of established guidelines and procedures.

According to a government auditor report, the government has lost around $40 billion in terms of potential revenue by allocating bandwidth since 2001 on a first-come, first-serve basis instead of via an auction and the telecom ministry is suspected of changing the rules to favor certain companies, many of which were ineligible.

The allegation against Raja, who became the telecom minister in May 2007, led to his resignation last November.

Earlier, the CBI had registered a case against unknown officials of the Department of Telecommunications (DoT).

For several months, the main opposition BJP has been demanding a full inquiry into the graft scam but it was only in December 2010 that the Congress government organized a one-man commission, Justice Shivraj Patil, to look into whether officials in the telecom ministry had, since 1991, violated government procedures and guidelines for allocating spectrum.

Earlier this week, Patil had handed over a report indicting Raja and others to the new Telecom Minister Kapil Sibal. The report, Patil told the media, focuses on procedural irregularities and not with regard to criminal culpability or financial implications.

Raja, who is a member of the DMK party, an important ally of the ruling Congress party, has denied any wrongdoing.

The arrested were presented before a special court on Thursday.