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2G spectrum: CBI quizzes Essar Group CEO Prashant Ruia

PTI  New Delhi , February 17, 2011
First Published: 19:55 IST(17/2/2011) | Last Updated: 01:38 IST(18/2/2011)

Continuing its probe into the 2G scam, the CBI on Thursday questioned Essar Group CEO Prashant Ruia in connection with the alleged role of his company with Loop Telecom, which got licences for 21 circles in January 2008.

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His questioning comes a day after ADAG Chairman Anil Ambani was called to the CBI in connection with its probe into the 2G scam, as the agency has to inform the Supreme Court by March 1 about the beneficiaries in the case.

According to official sources, Ruia was quizzed about the alleged association of Essar with Loop Telecom which came under scanner in the CBI case registered in October 2009.

The Essar CEO was called amid allegations that Loop Telecom acted as a front company for Essar which has a 33% stake in the Vodafone-Essar joint venture. If the allegations were found to be true, it would make Loop Telecom ineligible to get telecom licences.

As per the guidelines, the threshold of cross holding is below 10%.

"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 Essar spokesperson said.

According to the CAG report, Shipping Stop Dot Com (India) Private Limited (later on changed to Loop Telecom Private Limited) submitted its applications for grant of UAS licences for 21 service areas on September 3, 2007 to the DoT.

However, the company changed the main object clauses in its Memorandum of Association (MOA) of Article of Association (AOA) to include the telecom sector to meet the eligibility criteria only on September 28, 2007.

CAG said the submission of an altered MOA, suppressing the fact of non-registration of alterations in the main object clause of MOA/AOA, on the date of application was also in the nature of a fraudulent act with the intention of fulfilling the eligibility criterion prescribed for UAS licences.

Loop Telecom, also allegedly, made a patently false claim of the paid up capital of Rs. 130.65 crore through their Company Secretary V V Chakradeo while submitting their applications for grant of UAS licences for 21 service areas on September 3, 2007 to the DoT.

The CAG found the same fictitious, with a malafide intention to secure the UAS licences.


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