All roads lead to Mauritius. The Central Bureau of Investigation (CBI) probing the 2G spectrum scam now wants to spot the owners of eight companies based in Mauritius with links to Loop Telecom, in order to find if the Essar group violated cross-holding norms. The CBI is also hot on the trail of Delphi Investments of Mauritius, to which Reliance Communications sold its stake in Swan Telecom. Cross-holding norms bar telecom operators from holding over 10% in another telecom firm within the same telecom circle.
Since the Essar group has 33% stake in Vodafone-Essar, it needs to be ascertained whether its stake in Loop ? which got licences in 21 circles in January 2008 along with Swan and a few others ? was beyond the permissible 10%.
The CBI’s letter rogatory (request for investigation) has sought cooperation from the Mauritian government to investigate the shareholding pattern of eight companies with stakes in Loop Telecom.
The eight Mauritius-based companies held significant stakes in Loop Mobile India Ltd and Loop Mobile Holdings India Ltd, which together held 100% stake in Loop Telecom as on September 3, 2007.
The investigative agencies are probing as to who are the owners of these companies, five of which indirectly held 15.13% stake in Loop Telecom Pvt Ltd when it applied for a telecom licence. Capital Global Ltd, Black Lion Ltd, Inditel Holding, Deccan Asian Infrastructure (Mauritius) Inc, Aidetel Holding (Mauritius) Inc are those five companies.
According to the CBI, the shareholding pattern of Loop Telecom Pvt Ltd again changed and three more companies ? Kaif Investment Ltd, and Electro Investment Ltd and Palab Investment Ltd ? along with the previous five together held 45.43% stake in Loop Telecom Pvt Ltd.
Overall, in 2007, BPL Mobile Communications (now Loop Mobile Holdings India Ltd) held 51.24% equity stake in Loop Telecom. The remaining 48.76% was held by BPL Communications Ltd (now Loop Mobile India Ltd). On its part, the Essar group has denied any wrongdoing.
An Essar spokesperson said: ?Essar is in full compliance with DoT licence norms and all other applicable laws. As and when any information is sought, Essar will provide the same to the authorities?. However, Loop has got a clean chit on the cross-holding front from the Comptroller and Auditor General (CAG), which dd not find anything wrong. According to the CAG report, the company’s Memorandum of Association (MoA) didn’t have telecom on the date it had submitted the applications (September 3, 2007) and the subsequent alteration to include it in the required manner was registered with the registrar of companies (RoC) as late as September 28, 2007. Since the cut-off date for processing the licences was September 25, Loop’s application should have been rejected by the DoT, which was not done. Further, the company benefited due to the tweaked first-come-first-served policy by which Loop was able to pay ahead of others and get spectrum. According to the CAG, apart from the faulty MoA, the company suppressed the fact of non-registration of the alterations in the MoA and the article of association (AOA) and this was in the nature of a fraudulent act with the intention of fulfilling the eligibility criterion prescribed for the telecom licence.