Most of 2G licences given in 2008 were illegal: CAG

The Comptroller and Auditor General (CAG) has said 72 of 122 new 2G licences issued in January 2008 by the department of telecommunications (DoT) were awarded to companies that did not meet the eligibility criteria.

Datacom Solution, STel, the Unitech Group of companies, Loop Telecom and Allianz Infratech were issued licences in 2008, though they weren’t eligible to apply, CAG said in a note. Nine companies were given new licences in January 2008.

“DoT chose not to abide by its own guidelines and issued 122 licences without detailed verification,” it added.

"Termination of licence of five applicants by DoT would result in encashment of Rs 2,625 crore on account of financial bank guarantee of Rs 1,875 crore; and performance bank guarantee of Rs 750 crore,” the note said.

The audit body said the applications should have been rejected in the first place. "Since there were 343 other applications waiting to be processed, eligible applications from the waiting list based on the first-come-first-serve principle should have been considered for issue of licence," it said.