The Indian Supreme Court's 2G Ruling

In response to allegations of fraud and corruption, India's Supreme Court issued an order on Feb. 2, 2012, canceling every 2G mobile phone frequency license that the Indian government has awarded to telecommunication companies since January 2008 ' 122 licenses in total. See James Lamont, James Fontanella-Kahn, James Crabtree, and Daniel Thomas, Indian Court Revokes 122 Mobile Licenses, Financial Times (Feb. 2, 2012), www.fr.com/intl/cms/s/0/460354c8-4d6e-11e1-bb6c-00144feabdc0.html#axzz1ouq5jRVy. This decision highlights the importance of due diligence and anti-bribery compliance programs when companies conduct business in countries that historically present a greater risk of corruption. India, which is in the midst of a prolonged political battle to enact a new anti-corruption law (the Lokpal Bill), has experienced several major corruption scandals involving public officials over the past few years, and ranks 95 out of 183 countries on Transparency International's 2011 Corruption Perceptions Index. See Transparency International, Corruption Perceptions Index (2011), http://cpi.transparency.org/cpi2011/results.) As a consequence of the Indian Supreme Court's ruling, foreign (i.e., non-Indian) companies that formed joint ventures with, or invested in, Indian companies that held licenses, have suddenly found their investments substantially devalued, if not worthless.