South Korea’s Ministry of Science and ICT (MSIT) revoked Stage X’s mobile licence after completing a hearing following allegations in June the company failed to line up the capital needed and meet other requirements.

In a statement, MSIT explained it cancelled Stage X’s selection to receive spectrum because it had not complied with frequency allocation requirements and violated its pledge.

The ministry returned the entire frequency allocation fee of KRW43 billion ($31.2 million) paid by Stage X.

Stage X was awarded the country’s fourth mobile licence in February, securing spectrum in the 28GHz band and committing to invest KRW430 billion.

The Korea Times wrote questions surfaced about the newcomer’s ability to raise funds to build a nationwide network, with MSIT claiming Stage X did not raise the required paid-in capital and the company’s ownership structure differed from its initial proposal.

Stage X comprises a consortium led by messaging giant Kakao and including MVNO Stage Five.