<p>Summoned by trial court in CBI chargesheet on 2G spectrum case; Ruia says confident of proving innocence of self, group.
Ravi Ruia" alt="Ravi Ruia" src="/newsimgfiles/2011/december/22122011/122211_13.jpg" />Billionaire Ravi Ruia, summoned by the trial court in Delhi on the Central Bureau of Investigation chargesheet in the 2G telecom spectrum case, has stepped down “temporarily” as chairman of the London-listed Essar Energy Plc.
“However, he will continue as a director of Essar Energy,” said a company statement. “This decision follows allegations (by CBI) that Mr Ruia, certain other executives of the Essar Group, and Essar Teleholdings Ltd, an Indian company belonging to the Essar Group, had suppressed facts relating to the extent of equity holding of Essar Group in Loop Telecom Ltd.”
The company is listed on the London Stock Exchange and is also the only firm in which Ravi Ruia is a chairman. In all other group companies, listed or unlisted, it is his elder brother, Shashi Ruia, who is chairman.
The charge of Essar Energy chairman will be taken over by Prashant Ruia, vice-chairman and son of Shashi Ruia. Essar Energy is owned 76.72 per cent by Essar Global, the principal holding company for Essar Group’s business activities in India and abroad.
CBI had named the Essar Group promoters, Anshuman and Ravi Ruia, Loop Telecom promoters Kiran Khaitan and I P Khaitan, and Essar Group director (strategy and planning) Vikas Saraf, as accused in the case. On Wdnesday, taking cognizance of the CBI chargesheet against Essar-Loop, the court summoned all the eight accused, including three companies, to appear before it on January 27. The companies named are Loop Telecom Pvt Ltd, Loop Mobile India Ltd and Essar Tele Holding.
The statement, issued on behalf of Ravi Ruia, said: “I believe that as a good corporate governance measure and to ensure the board and management of Essar Energy continue to be fully focused on successfully delivering against their strategy, I should step aside at this time. Essar Group has always been open, transparent and law-abiding, and I am confident these charges will be dismissed by the courts in India. I expect that I would resume the office of chairman at an appropriate time.”
The CBI chargesheet said Loop had made fraudulent Unified Access Service Licence applications for 21 telecom circles on September 3, 2007. This, it said, was a result of “the entire conspiracy to cheat the DoT (department of telecommunications) through a fraudulent corporate veil, to hide the actual holding structure of Loop Telecom and Loop Mobile (erstwhile BPL Mobile), which was committed through Essar Teleholdings.”
Brothers Shashi and Ravi Ruia, whose Essar Group has interests in oil refining, steel and power generation, weighed in at fourth place on Forbes’ list of India’s 100 wealthiest people. Only Mukesh Ambani, Lakshmi Mittal and Azim Premji were ahead.
“The summon has to be served, there is no likelihood of arrest,” Essar Group counsel Mahesh Agarwal told Business Standard.
There are several options for Ruias, including applying for anticipatory bail. The counsel said a decision on this matter would be taken on the basis of the next court order. The Supreme Court judgement on the bail of other corporate honchos in the 2G case, including executives of Reliance and Unitech’s Sanjay Chandra, is also why Essar is confident there will be no arrest. “In this case, the charges are much lower. There is no charge under the Prevention of Corruption Act,” Agarwal added.
Essar Energy said it was surprised at the CBI charges.
“The allegations relate principally to a certification given by Loop Telecom at the time of grant of UAS licences (mobile telecom licenses), that Loop was in compliance with Clause 8 of the guidelines under which such licences were issued. This clause prohibits any shareholder company (directly or through its associates) from holding 10 per cent or more equity shareholding in more than one mobile licensee company. Essar Group is surprised and disappointed by the stand taken by the CBI, especially because the Indian ministries of law & justice and corporate affairs have already reviewed the facts and confirmed that the direct and indirect shareholding of the Essar Group in Loop was below 10 per cent and, therefore, there was no such violation and no prima facie case of any offence can be made out,” was its statement.