The Comptroller and Auditor General (CAG) has accused major real estate firms -- Unitech and Allainz Infratech-- for misreprsentaing facts to the government for getting telecom licences along with spectrum in 2008 causing huge losses to the exchequer.
Six newly-incorprated applicant companies belonging to Unitech group (brand name Uninor) had submitted their applications for grant of 20 licences to the Department of Telecommunications on September 24, 2007.
Along with their applications, these companies had submitted copies of their Memorandum of Association/Articles of Association and indicated they meet the eligibility criteria for grant of Unified Access Service (UAS) licences.
On verification, it was revealed that all these companies had suppressed the conditional nature of certification of registration with the Registrar of Companies (RoC) on September 20, 2007 while registering the alteration in the main object clause in the Memorandum of Memorandum of Association/ Articles of Association
According to the CAG report, the condition of the change of name of these applicant companies was met in May 2008 only, while the licences were issued in January 2008.
"As a result, all these six new companies were registered afresh with with the new names in may 2008 with the RoC... As a result, the Memorandum of Understanding of these companies did not permit them to operate in telecom sector on the date of application i.e., September 24, 2007.
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"Hence, they were ineligible for the grant of UAS licences," the CAG said.
The CAG has pegged a revenue loss of up to Rs 1.76 lakh crore for non-auctioning of spectrum to new licencees and also for allotment of additional spectrum to existing operators.
Similarly, Allianz Infratech (now merged with Etisalat) submitted its application for grant of licences in all 21 circles (pan India) on September 3, 2007 to the DoT without disclosing the fact of non-registration of alteration of the main object clauses in the Memorandum of Association as on the date of application.
"The company had changed the main object clauses in the Memorandum of Association and Association of Articles so as to include the telecom sector... But these alterations were registered by the RoC on September 28 , 2007 only. Thus they were also not eligible for grant of UAS licence on the date of submission of application," it added.
The auditor also pointed out that 13 companies did not have the requisite authorised share capital on the date of submission of the applications. Hence the question of their meeting the eligibility criterion of the paid up capital did not arise.