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Loop-Essar: MCA-CBI differences out in open

BS Reporter  |  New Delhi 

Difference between the Ministry of Corporate Affairs (MCA) and the Central Bureau of Investigation (CBI) came into the open on Friday with the MCA reiterating publicly that the Essar group has less than 10 per cent equity holding in Loop

Murli DeoraMurli Deora Corporate affairs minister on Friday told reporters: "The records available with the Registrar of Companies (RoC) indicate that the holding of the promoters of Essar was less than10 per cent in Loop."

Deora's public statement comes close on the heels of a submission by the CBI to the Supreme court this week in which the investigation agency has stated that they do not accept the clean chit given to Essar in Loop

In April this year, the Ministry of Corporate Affairs (MCA) had given a clean chit to Loop saying that the company was not an associate of Essar as the Ruias-promoted group had only a 2.15 per cent stake in the firm when it applied for the Unified Access Service Licence (UASL) in 2007.

In a letter to the Department of Telecommunications, the Corporate Affairs ministry said, 'The Essar Group, directly or indirectly, held only 2.15 per cent of Loop Telecom, as on Sept 3, 2007, the date on which the application was made to DoT for UAS licence'

Deora said that the matter has been conveyed to CBI and a confusion on this issue was caused by “a communication gap” between the ministry and the top investigation agency, has been cleared.

According to a senior government functionary, the controversy arose from the difference in figures quoted in the MCA reports on the issue given on two occasions. While the first report, given when Salman Khurshid used to be Corporate Affairs minister quoted Loop’s shareholding as close to 10 per cent, the second one, given during Deora’s time mentioned it as less than 3 per cent. This difference, caused by a clerical error, do not alter its original position that Essar’s holding in Loop was less than 10 per cent, the person said.

CBI has said that the Essar group through its associate companies based in Mauritius have control over Loop Telecom which is in violation of the licence norms . Under the licence norms a telecom company cannot have more than 10 per cent stake in a competing company in the same circle.

As Essar controlled a 33 per cent stake in Vodafone-Essar it was could not have had more than 10 per cent stake in Loop Telecom which had applied for and got a pan India licence in 2008. Essar says and officials in the ministry endorse that it has only less than 3 per cent stake in Loop Telecom.

First Published: Sat, July 09 2011. 00:15 IST
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