CBI seeks AG's views on Essar-Loop tangle

The Central Bureau of Investigation (CBI) has sought Attorney General G E Vahanvati’s views on the Loop-Essar link to the 2G spectrum allocation scam.

CBI was caught in the Loop-Essar tangle following a contradiction in opinion from the director of prosecution over its allegation that Loop was a group company of the Essar Group. Recently, the law ministry had also offered its opinion on the matter, saying that Loop could not be termed as an ‘associate” of Essar.

CBI sources said the agency had not been able to file a chargesheet in the case because of the contradiction of opinion. The opinion of the AG is expected to come within the next two weeks. “There are several opinions involved in the case, including those of the law ministry and ministry of corporate affairs. We are putting everything before the AG for his opinion,” said CBI source.

According to the legal opinion, Loop cannot be called an 'associate' of Essar Group, however, CBI is alleging that Loop is the front company of Essar. CBI has placed on record the law ministry opinion on the definition of 'associate' which says there must be more than 50 per cent shareholding in both companies by the common parent holding shares in either of the two companies to be termed as an associate.

While the investigating agency alleges that cross-holding of shares of the Ruias-led Essar in Loop Telecom exceeded 10 per cent, violating the norms set by the department of telecommunications, the corporate affairs ministry said Essar held only 2.15 per cent stake in Loop at the time when the 2G licence was granted.

Last month, three former Essar officials submitted before a court that Essar was in control of Loop Telecom when 2G licence was allocated to the company.