ED issues showcause notices to Loop Telecom companies

The Enforcement Directorate (ED) has issued show-cause notices to telecom companies Loop Telecom and Loop Mobile for alleged violation of foreign exchange laws to the tune of Rs 384 crore.

This is the second such notice issued to telecom companies recently. The first notice under the Foreign Exchange Management Act (Fema) was issued to Etisalat DB, formerly known as Swan Telecom, in July for Rs 7,260 crore.

While Loop Telecom has been fined Rs 184 crore, the fine in case of Loop Mobile is Rs 200 crore. Earlier, Loop Mobile was fined Rs 431 crore, which has been reduced to Rs 200 crore.

The ED had earlier slapped various charges of Fema violations on Loop Mobile India and Loop Telecom, and the adjudicating authority has now accepted the complaints filed by the investigators, according to people close to the development.

The adjudicating authority in this case is the special director of ED based here, according to an agency report.

“These contraventions are done by the said companies in not reporting the receipt of funds from abroad within the stipulated period of time to the Reserve Bank of India and in not reporting the issue of shares to foreign investors within the stipulated period of time,” the ED said.

The Essar group has also been alleged of using Loop Telecom as its front company for applying pan-India unified access service licence in 2008.