Essar CEO caught in a ‘Loop’ by the CBI

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New Delhi, May 12: After more and more corporate honchos appear to be getting involved into the 2G spectrum scam, the matter seems to be snowballing into something larger. The latest corporate head in the scam is the Essar Group CEO Prashant Ruia who appeared before the Central Bureau of Investigation (CBI) for questioning over his involvement in the scam.

The investigative agency is especially probing Essar"s alleged links with Loop Telecom, which got Unified Access Service. The association is being probed with the CBI already registering a case on the spectrum allocation in Oct 2009.

Ruia was called for questioning after rumours spread that Loop Telecom acted as the front company for Essar that has close to 33 percent stake in the Vodafone-Essar joint venture. If any truth is found in the allegations, Loop Telecom will lose its license since the guidelines say that the limit of cross-holding is 10 percent.

A spokesperson for Essar said, “Essar in is full compliance with DoT licence norms and all other applicable laws. As and when any information is sought Essar will provide the same to the authorities."

An earlier CAG report stated that Shipping Stop Dot Com (India) Private Limited that later became Loop Telecom Private Limited had sought UAS licences for a period of 21 service areas on Sept 3, 2007 to the DoT. The company meanwhile changed the main object clauses in its Memorandum of Association (MOA) of Article of Association (AOA) to include the telecom sector, thus wrongfully meeting the eligibility criteria only on Sept 28, 2007.

Loop Telecom also made a wrong claim of their paid-up capital of Rs 130.65 crore through their Company Secretary VV Chakradeo in the process of submitting applications for the UAS licences. The CAG later found the means of attaining the UAS licenses malafide.

OneIndia News

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