The Department of Telecommunications (DoT) plans to issue showcause notices to nine companies for 85 of the 122 mobile permits awarded by A. Raja, former Minister of Telecommunications and IT.
This follows the Comptroller and Auditor General of India (CAG) stating that these licences were illegal. A showcause notice is the first step towards termination of the licence, and enhancement of the Rs 26.25 billion bank guarantees submitted by each of these companies.
In 2010, the CAG had asked DoT to explain why mobile permits were given to Unitech Wireless, Loop, Videocon, S Tel, Etisalat DB and Allianz Infratch, as these companies did not fulfill the eligibility criteria for obtaining the permit.
The auditor also said that the companies that got these permits, notably Unitech, S Tel, Loop Mobile, Datacom (Videocon) and Etisalat had disclosed incomplete information and submitted fictitious documents.
It is believed that DoT decided to issue the notices after the Attorney General of India had upheld the CAG?s view that Adonis Properties, which holds mobile permits in six regions and is a subsidiary of Unitech Wireless, was not eligible for getting these licences.
DoT feels that the Attorney General of India?s view is applicable to other new entrants, including Loop Telecom, Videocon, Allianz Infratech and STel, since the national auditor had pointed out that these companies too were subject to the same violations.
In Unitech Wireless? case, the CAG had said that the operator had changed the object clause of the Memorandum of Association (MoA) from real estate to telecom and had also enhanced its authorised capital by passing a new resolution. Also, both these alterations were certified as registered by the registrar of companies subsequent to the firm submitting its application to DoT for grant of UAS licence. These alterations became applicable only in May 2008, while Unitech was given a licence in January that year.
In the case of Videocon and S Tel, CAG said that both companies did not have the authorised share capital in their MoA.
