The draft report, made available today, of Parliament’s Public Accounts Committee (PAC) on the telecom spectrum allocation scam, has held that 85 of the 122 new licenses issued to 13 companies did not satisfy eligibility conditions prescribed by the Department of Telecommunications (DoT).
“All 85 licenses were given to companies which did not have the stipulated paid-up capital at the time of application,” the draft report states.
It found that certain firms which had declared real estate as their main object were given licenses by DoT. The report said, “DoT failed in cross-verifying the status of companies with the Ministry of Corporate Affairs, there were gross violation of rules and regulations to favour M/s Swan and Unitech.”
The Committee said its examination of the issuance of licenses to ineligible operators found media reports specifying the names of the 10 companies to be awarded licences even before Letters of Intent (LOIs) were issued by DoT. On January 10, 2008, when the same names were made known, a window of just 45 minutes was given to deposit a demand draft of Rs 50 crore to the ministry. The draft report says certain companies were privy to the information about the time LOIs were to be issued and a representative of Swan confirmed most applicants had deposited the money the same day.
The report also raised questions on government-owned Bharat Sanchar Nigam Ltd being made to sign a Memorandum of Understanding (MoU) with Swan for an intra-circle roaming arrangement.
An independent expert with vast experience of the telecom sector, the report said, had testified that “all pseudo methods and dirty tricks were used by these companies to get into the telecom market at the cost of taxpayers’ money.” The companies which were granted licences sold these, making “huge windfall gains, what experts described as true value of the spectrum, which were actually to go to the government coffers”.
The draft report recommends that the government make an assessment of the loss to the public exchequer. Additionally, the DoT failed in its duty of keeping a watch over the compliance aspect related to roll-out of 2G services once the licences were issued to operators.Stern action against companies guilty of suppressing facts and presenting fictitious documents has been recommended. And, that details of action taken against and replies sent by ineligible operators in response to the showcause notice issued by the DoT be furnished to PAC.
