The Department of Telecom has asked the Comptroller and Auditor General to drop the audit relating to Government's decision to allocate broadband spectrum to Reliance Jio.
The DoT has said that it gave a presentation to the CAG before the spectrum auction in 2010 and allegations being made now were not raised then.
Reliance Jio, a subsidiary of the Mukesh Ambani-led Reliance Industries, acquired Infotel Broadband Services in June 2010, soon after the firm won nationwide broadband spectrum, spending nearly ₹13,000 crore. Infotel had acquired an ISP licence, under which voice telephony is not permitted.
The CAG, in a draft report, said it was surprising that the Government did not satisfy itself as to how Infotel Broadband, a company with a networth of ₹2.5 crore, would be able to pay the bid amount of ₹12,847 crore.
The auditor said eligibility conditions for the auction were not stringent enough to keep out “front companies”.
It said that though Reliance acquired Infotel Broadband on June 11, 2010, a few hours after the close of the auction, the Government did not raise a red flag on possible violation of confidentiality conditions by Infotel.
The DoT has rejected these allegations saying that an Inter-Ministerial panel had applied its mind on the auction process. The CAG will now take a final call on how to proceed with the issue after taking DoT’s view on board.