Parsvnath mobile plan hits roadblock at DoT

Real estate firm Parsvnath Developers' quest for a mobile licence seems to have hit a roadblock at the Department of Telecom (DoT).

Parsvnath, which is one of the seven realty firms in the fray for mobile licences, hasn't mentioned the business of "telecommunications" in its memorandum of association (MoA).

The document is submitted at the time of incorporation to the registrar of companies, which takes it on record.

It contains the "main objects of business" which clearly mention the business fields and activities that the proposed venture plans to undertake.

It is up to the promoters to prepare the document and most of the proposed entities at the time of incorporation choose to cover the entire gamut of activities that they wish to be in.

However, at the time of entering a new business or applying for a licence, the name of that business activity must be contained in the "objects of business".

Parsvnath Developers Chairman Pradeep Jain, who has applied through his listed entity, said he had already explained to DoT that clause 17 in the company's MoA allowed it to enter into any business with any government agency.

"I have told them to issue me a letter of intent and I will modify my memorandum," he said.

Jain clarified that his company had not received any formal communication in this regard from DoT.

Other real estate companies denied they faced similar problems. Barring BPTP, all the others "� DLF, Unitech, Indiabulls Real Estate, Avnija Properties and Omaxe "� have applied through privately held subsidiaries.

Unitech sources said all eight subsidiaries, which the company has applied through, have amended their MoA. "We face no such problem," they said.

Omaxe also said that it has taken care of the MoA and is compliant with the requirements. BPTP said it had amended its MoA four months ago.

DoT officials, who are scrutinising applications with regard to eligibility, can reject an application on this ground. However, it is probable that the department could allow retrospective amendment of the MoA.

All applications will be scrutinised for other compliance issues.

On October 15, DoT issued an internal directive on the processing and scrutiny of pending applications that lays down a four-point approach to be adopted in this regard.

Accordingly, the department will examine the pending applications "as per the existing guidelines and in chronological order of receipt."

Officers from various branches within DoT will scrutinise the applications with particular emphasis on net worth and paid-up equity capital of the company among other eligibility norms.

Cases requiring clarifications on legal issues will be referred to the department's legal advisor, while other officers will check the applications on foreign equity and for clearance by the Foreign Investment Promotion Board.