Remember 2G Spectrum Scam? Electoral Bonds Data Sparks New Controversy

Bharti Group’s Donation to Ruling Party and Government’s Telecom Policy Shift

Newsreel Asia Insight #174
March 28, 2024

The Indian government’s recent move to assign satellite spectrum through administrative order, bypassing competitive auctions, has ignited controversy, reminiscent of the 2G spectrum scam that once rocked the nation. The decision, encapsulated in a new telecom law, has raised eyebrows, especially in light of substantial electoral bond donations to the ruling Bharatiya Janata Party (BJP) by Bharti Enterprises, the largest shareholder of Eutelsat OneWeb, the sole beneficiary of the spectrum allocation so far.

The 2G spectrum scandal, a significant event during the United Progressive Alliance’s tenure, led to the Supreme Court’s 2012 mandate for auction-based spectrum allocation. However, the current administration has opted for a similar discretionary route as its predecessor, allowing satellite spectrum assignment via administrative order, according to a report published by The News Minute, part of a collaborative project involving two other news organisations, Newslaundry and Scroll, and independent journalists.

This shift was formalised in December 2023 with the enactment of a new telecom law, despite the prior advocacy for auctions by major telecom players like Reliance Jio and Vodafone India, the report says.

OneWeb India, part of Eutelsat OneWeb and indirectly linked to Bharti Enterprises, emerged as the front-runner in acquiring the necessary licenses and authorisations for satellite spectrum. The happened alongside Bharti Airtel’s purchase of electoral bonds worth 1.5 billion rupees, donated to the BJP, creating a potential conflict of interest and sparking debates on the transparency and ethics of such transactions, according to the report.

The situation is further complicated by the diverse shareholder base of Eutelsat OneWeb, including entities from countries with strict anti-corruption regulations. Apart from Bharti Enterprises, Eutelsat OneWeb shareholders include the U.K. government, French Satellite provider Eutelsat and Japanese investment bank SoftBank. 

As of March 18, 2024, Bharti holds the largest share in Eutelsat OneWeb at 23.8%, as stated on the Eutelsat OneWeb website, the report noted. Ownership stakes are held by the U.K. government at 10.9%, Bpifrance at 13.6% and SoftBank at 10.8%. Kush Amin, a Legal Specialist at Transparency International, was quoted as saying that this shareholding structure could lead to potential legal issues for Eutelsat, the parent company, especially if evidence emerges that they knew about Bharti’s financial contributions to the BJP, highlighting the concern for the French company.

The State Bank of India has reported that 22,217 electoral bonds were bought between April 2019 and February 2024, with the BJP receiving nearly 48% of the total redeemed bonds, amounting to 60.6 billion rupees. The Supreme Court’s directive for the SBI to disclose bond details seeks to enhance transparency.