In a startling revelation, the Comptroller and Auditor General (CAG) has said that 72 out of 122 new 2G spectrum licences issued by Telecom Minister A Raja in January, 2008, were awarded to companies that did not meet the eligibility criteria.

According to the government auditor, Datacom Solution, STel, the Unitech Group of companies and Allianz Infratech, among others, were issued licences in 2008 even though they did not meet the eligibility criteria prescribed by the DoT at the time of application.

This, sources said, may prompt the Telecom Ministry to issue showcause notices to new operators, including STel, Unitech Wireless and Datacom.

The DoT has asked for access to the documents available with the auditor for further investigation into the case and to issue a showcause notice for further action, including termination of the licences awarded to the ineligible telcos, they added.

If the DoT decides to terminate the licences, it would result in encashment of guarantees worth Rs 2,625 crore, including financial bank guarantees worth Rs 1,875 crore and performance bank guarantees worth Rs 750 crore.

"As per DoT's own stipulation, none of these companies were eligible to apply for the grant of unified access service (UAS) licences on the date that they submitted their applications in DoT," an internal CAG note said.

"... DoT chose not to abide by its own guidelines and issued 122 licences without detailed verification of the documents submitted by the applicants," it added.

The audit body said the applications should have been rejected in the first place.

According to sources, the DoT is yet to respond to the CAG's latest report, which also observed that the Telecom Ministry did not consider the Law and Finance Ministry's views on allotment of 2G spectrum.