Pressure is buildings up on the Congress-led United Progressive Alliance Government to get rid of Union Telecom Minister A Raja for his alleged link to the 2G spectrum scandal. The final Comptroller and Auditor General (CAG) report which CNN-IBN has accessed also shows how some companies which failed to meet the eligibility criteria were favoured by the Telecom Ministry.
The report clearly says that many of the companies were privy to insider information and were given undue favours to win the licences.
Out of the 122 new licenses that were given out, 85 licenses were won by companies that did not meet the eligibility criteria. Six of the Unitech group companies which applied for licenses for 20 circles did not meet requirements.
Such was the hurry to get into telecom that they altered memorandums of association with government clearance and should have been rejected. But in Raja’s tenure they ended up winning several circles.
According to the CAG 12 companies lied about their paid up capital. Bidders must have a minimum of Rs 3-10 crore as paid up equity capital but most of the companies who won the licenses did not meet the mark.
As per the laws a company cannot have stakes in more than one licensee company for the same area.
This rule was ignored for Swan Telecom, where Reliance held over 10 per cent equity stake at the time of the license application.
The CAG report says Department of Telecom also gave undue benefit to Reliance Communications for introducing GSM in 20 circles almost immediately while others has to wait for a year longer.
The fact that many of the original bid winners sold stakes at a huge premium to others shows that there was money to be made.
Now that the CAG has certified the allegations, the heat will be on the companies as well.