As per the Comptroller and Auditor General (CAG) , 72 out of 122 new 2G spectrum licenses issued by Telecom Minister A Raja in January, 2008, were awarded to companies that did not meet the eligibility criteria.

According to the government auditor, Datacom Solution, STel, the Unitech Group of companies and Allianz Infratech, among others, were issued licenses in 2008 even though they did not meet the eligibility criteria prescribed by the DoT at the time of application.

If sources are to be believed, the Telecom Ministry may issue show cause notices to new operators, including STel, Unitech Wireless and Datacom.

The DoT has asked for access to the documents available with the auditor for further investigation into the case and to issue a show cause notice for further action, including termination of the licenses awarded to the ineligible telcos.

If the DoT chooses to terminate the licenses, it would result in encashment of guarantees worth US$59.15 million, including financial bank guarantees worth US$42.25 million and performance bank guarantees worth US$16.90 million.

As per an internal CAG note, as indicated by DoT’s own stipulation, none of these companies were eligible to apply for the grant of unified access service (UAS) licenses on the date that they submitted their applications in DoT. DoT chose not to abide by its own guidelines and issued 122 licenses without detailed verification of the documents submitted by the applicants.

According to the audit body, the applications should have been rejected in the first place.

According to sources, the DoT is yet to respond to the CAG’s latest report, which also observed that the Telecom Ministry did not consider the Law and Finance Ministry’s views on allotment of 2G spectrum.