2G scam verdict: On Loop Mobile, Essar group stand vindicated

By: |
New Delhi | Published: December 22, 2017 5:05:46 AM

The Essar Group was charged by the Central Bureau of Investigation (CBI) in the 2G spectrum scam, which alleged it had set up a front company, Loop Mobile, to acquire 21 unified access services licenses (UASL) in 2008.

2G scam verdict, Essar Group, Loop Mobile, Essar Teleholdings, Indian Penal Code, DoT, VODAFONE, UAS license, UASL, 2G spectrum scam, detail info about 2G spectrum scam, news about 2G spectrum scamThe Essar Group, which had 33% stake in Vodafone-Essar, acquired UAS licenses in the same circles through Loop Mobile, which the CBI alleged, was nothing but a front company. (Reuters)

The Essar Group was charged by the Central Bureau of Investigation (CBI) in the 2G spectrum scam, which alleged it had set up a front company, Loop Mobile, to acquire 21 unified access services licenses (UASL) in 2008. A front company effectively allowed the company to bypass the cross-holding norm, which disallows any firm having a UAS license from holding more than 10% stake in another firm possessing the same license in the same circles. The Essar Group, which had 33% stake in Vodafone-Essar, acquired UAS licenses in the same circles through Loop Mobile, which the CBI alleged, was nothing but a front company. Those chargesheeted were Essar Group promoter and vice-chairman Ravi Ruia, his nephew Anshuman Ruia, a director on the board of several group firms, the group’s director, strategy and planning Vikas Saraf, Kiran Khaitan and her husband IP Khaitan. Kiran is the sister of Essar Group promoters Ravi and Shashi Ruia. The Khaitans, who are the promoters of Loop Mobile, were alleged to have acted as a front for the Essar Group to acquire the licenses. Besides the five executives, three companies were also chargesheeted – Loop Telecom, Loop Mobile India and Essar Teleholdings.

All of them were chargesheeted under Section 420 (cheating) and Section 120 B (criminal conspiracy) of the Indian Penal Code. However, the company was not charged under the Prevention of Corruption Act. That effectively meant Essar-Loop executives did not conspire and collude with the officials of the department of telecommunications to get the licenses. In essence, the CBI was alleging the company violated the contract that it had entered into with DoT upon getting the license. On Thursday, after the special 2G court acquitted the company of all the charges, Essar Group in a statement said, “We are thankful to the Hon’ble Court for the judgment since it vindicates our stated position, and the Hon’ble Court has accepted it.”

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

FinancialExpress_1x1_Imp_Desktop