‘Loop got Rs 700 crore advance from Essar’ | india | Hindustan Times
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‘Loop got Rs 700 crore advance from Essar’

india Updated: Sep 17, 2011 01:19 IST
Rajesh Ahuja
Rajesh Ahuja
Hindustan Times
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A key witness in the 2G case has given a statement before a magistrate that an Essar group company Essar Telecom Infrastructure (ETI) had provided an advance of Rs 700 crore to Loop Telecom for rolling out cellular towers.

“This amount was transferred in ETI from other Essar group companies and then given to Loop Telecom” said Ajay Madan, who was the CEO of ETI.

Madan's statement sheds light on the relationship between Essar Telecommunications and Loop. The CBI suspects that Loop Telecom is front company of Essar group. Essar group holds 33% stake in an existing operator Vodafone Essar. According to the Unifed Access Service (UAS) licence guidelines, an existing operator cannot hold more than 10% stake in another telecom service provider. Loop has UAS licence for 21 telecom circles.

“Essar would like to reiterate that it is and has always been in full compliance with UAS licence norms and is fully co-operating with the government authorities,” said an Essar spokesperson.

According to Madan's statement, Vikas Saraf, the CEO of Essar Telecommunication Business group, had asked him to look after the initial roll out of Loop Telecom. Saraf also asked Madan to depute one person from ETI to help him preparing all documents required for the UAS licence application. Madan deputed his staffer PR Karnik.

According to sources, Karnik has recorded his statement before a magistrate. Besides, Loop’s company secretary, Priyadarshi Sidharth has also given a statement under section 164 of the CrPC. These statements are admissible as evidence in the court. Armed with the statements, the CBI plans to file chargesheet in the Loop-Essar case.

Madan said that one day Saraf told him that Loop will require to roll out 20,000 towers and an MoU should be signed between ETI and Loop. Madan clarified the structure and conditions of the MoU were similar to what ETI signed with others except for the advance of Rs 700 crore.