The basic telecom service company is the Maharashtra licensee, Hughes Ispat. The cellular companies are Modicom Networks, HHS Communications, Tata Communications, Sterling Cellular (now under control of Essar Telecom), Koshika Telecom and Fascel. The MNC telecom equipment vendors include Ericsson, Nokia, Motorola, Lucent Technologies, Alcatel and Siemens. Modicom Networks and Fascel were sent notices early-August.
In a probe that started in April, directorate officials are investigating allegations of corruption in the award of the Maharashtra basic telecom services licence to Hughes Ispat. They expect to establish contact with the company soon.
Cellular companies which had seen a change in original partners are also under the directorate probe. Under the tender guidelines, the original partners are required to hold a minimum 10 per cent in the consortium for at least three years after award of the licence. Some companies had asked DoT for a waiver of this rule because the foreign partners were neither willing to pump in more funds nor lower their equity stake.
Modicom Networks was one company which changed the original foreign partners completely. (Vanguard Cellular of the US and Telecom International, Thailand held 26 and 23 per cent initially.) While the change was eventually allowed as a special case, we want to look into it, specially since equity in Modi Welvest, the holding company of Modicom, was sold at a premium of Rs 5 or so, an official said.
Similarly, in the Fascel (a consortium of HFCL, Bezeq and Shinawatra) case, a 51:49 holding company joint venture is proposed between HFCL and the American Insturance Group. The holding company is expected to fund HFCL's 40 per cent stake in Fascel.
The 49 per cent offloading to AIG (at a premium of around Rs 4 per share) means that HFCL's burden of funding the 40 per cent stake in Fascel is effectively halved. This, in turn, gives Shinawatra