Charge sheet filed in 2G case; Essar denies charges, to take legal recourse.
The Central Bureau of Investigation (CBI) on Monday unveiled fresh charges in the 2G spectrum scam, adding the Essar Group and a few of its promoters and key executives to the list of companies and high-profile individuals named in the case.
The CBI’s third set of charges, pertaining to cheating and criminal conspiracy, names Essar group vice-chairman Ravikant Ruia and his nephew Anshuman Ruia, director. The CBI also filed similar charges against Kiran Khaitan, sister of Ravikant Ruia, and her husband, Ishwari Prasad Khaitan.
Vikas Saraf, director of strategy and planning and mergers and acquisitions at the Essar group, also features in the charge sheet.
The agency also named three companies, Loop Telecom Pvt Ltd, Loop Mobile India Ltd and Essar Tele Holding, as accused in the case. All of them have been chargesheeted under Section 120 B (criminal conspiracy) and 420 (cheating) of the IPC.
The 105-page charge sheet containing 398 documents was brought in five trunks before judge O P Saini, who will take cognisance of it on December 17. The charge sheet named 100 prosecution witnesses.
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The CBI said Essar group used Loop Telecom Pvt Ltd as a “front company” to get spectrum and licences in 21 of India’s 22 telecom service areas in 2008, at a time when the group already had 33 per cent stake in Vodafone’s Indian mobile telecom unit, Vodafone-Essar.
This violated Clause 8 of the Unified Access Service Licensing (UASL) guidelines.
The clause referred to cross-holding rules preventing any operator from owning more than 10 per cent stake in another mobile telecom company with licences in the same service area, the CBI said.
Shares of Essar group companies slumped on the Bombay Stock Exchange on Monday. Essar Oil slid 11 per cent to Rs 59.75, Essar Ports ended 7.7 per cent lower at Rs 61.65, while Essar Shipping tumbled 9.7 per cent to Rs 21.80.
The Essar group, however, has denied all charges and said it would take legal recourse. In a statement, the group said it was unprecedented that charges had been made against them despite the government confirming there was no Clause-8 violation and it was only a contractual issue. Under Clause 8, a company cannot have more than 10 per cent stake in another competing telelcom company in the same circle.
The group said the law ministry as well as the corporate affairs ministry had confirmed there was no violation of Clause 8. “Similar contractual violations in the past have not attracted any fine/penalty or charges," it said. The group stated its stand that it was not involved in 2G irregularities had been vindicated by the CBI on Monday. Essar said the CBI and the Attorney General had gone contrary to the opinion given by the two ministries. The CBI had also gone against its internal legal advice, the group said, adding the Department of Telecom (DoT) had neither complained of a Clause-8 violation nor cheating as alleged. Under the UASL guidelines, the DoT has the power to issue a show-cause notice and cancel the licence of a telco for violating the licensing terms.
Essar said it held only 2.15 per cent of Loop when the latter applied for telecom licences and, therefore, there was no violation of cross-holding rules. The charges won’t impact the group’s business operations.