Govt stands by opinion on Essar-Loop, no review

The Corporate Affairs Ministry today said it will not review its report on the Essar-Loop shareholding as the opinion was given "by the provision of law", even as the Supreme Court has cancelled 122 2G licences granted during the tenure of former telecom minister A Raja.

"We gave the opinion on the provision of law. Where is the question of review. We receive reference from a ministry and we illustrate it. There is no question of interpretation, that is for the respective ministry to do," Corporate Affairs Minister Veerapp Moily told reporters on the sidelines of a PHD chamber event here.

He was replying to a question whether his ministry, which was pulled up by the CBI in court for its report on Essar-Loop cross-holding, would reconsider its stance.

The Ministry of Corporate Affairs had informed the DoT that Essar's cross-holding shares were at 2.15% and not above 10% as alleged by CBI.

CBI in its third charge-sheet in the 2G spectrum case, had alleged that Loop Telecom Ltd was an Essar Group company "under a corporate veil" and even the Ministry of Corporate Affairs (MCA) and the Department of Telecommunications (DoT) "chose not to investigate" and allowed it "to rest".

The charge-sheet had said despite the report of a Deputy Director (inspection) of MCA that the Clause 8 of the Unified Access Services Licences (UASL) guidelines of 2005 was violated. The Ministry "instead of conveying such a definite opinion to the DoT chose to send a non-committal vague report".

Earlier this month, in a major development having implications for the telecom sector, the Supreme Court has cancelled 122 2G spectrum licences on the ground that they were issued in a "totally arbitrary and unconstitutional" manner.

It also imposed a fine of Rs five crore each on three telecom companies, which offloaded their shares after getting the licenses, the court directed regulator Telecom Regulatory Authority of India (Trai) to make fresh recommendations on allocation of 2G licences.

The 122 licences were given by Raja for over Rs 9,000 crore, while 3G auctions for a smaller number of licences had fetched the government a sum of Rs 69,000 crore.