SG rubbishes CAG’s claims, says no favor to RIL by DoT

NEW DELHI: Solicitor-General Ranjit Kumar has rejected claims by the Comptroller and Auditor General (CAG), which said Reliance Industries Ltd (RIL), the parent company of Reliance Jio, was conferred undue advantages by the telecom department that caused losses to the tune of Rs 22,842 crore to the exchequer, media reports said.

Reliance Jio was colluded with Infotel Broadband Services (IBSPL), the sole winner of pan-India airwaves in the 2300 MHz band (used for 4G services), in spectrum auctions carried out in 2010. After the 2010 sale auctions, RIL bought 95% in Infotel and later renamed it Jio.

CAG had alleged in a draft report that Infotel was acting as a front for RIL. The telecom department (DoT) favoured Jio by allowing it to convert its internet service permit (ISP) into a unified licence (UL) at Rs 1,658 crore.

"This (CAG's view) appears to be a very narrow perspective of the matter," Kumar said in the draft report in a 14-page opinion to the Department of Telecom (DoT).

The permission to offer voice services, plus other favours, had caused a loss of Rs 22,842 crore, as per CAG. ISP allowed the company to offer wireless broadband services (4G) while UL was needed for voice services.

Kumar's opinion was sought by the DoT while formulating the department's responses to the CAG's analysis. The CAG's draft report is also the basis for a public interest litigation filed by NGO, Centre for Public Interest Litigation (CPIL), in the Supreme Court, which alleged wrongdoing by the DoT in allowing Jio to offer voice telephony.

Responding to CAG's analysis of the acquisition of Infotel Broadband by RIL, the S-G said that the auction rulesmentioned that a change in shareholding was permissible immediately after the auction, so long as it didn't affect the eligibility of the bidder.