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The CBI was ordered on Monday by a city court to submit to it a Law ministry report defining the term ‘associate’ and purportedly saying that the 2G spectrum allocation scam beneficiary Swan Telecom was not an associate of Reliance Telecom Ltd (RTL). “It is ordered that CBI would place a copy of the report received by it from Ministry of Law and Justice through Department of Telecommunication on (court’s) record on the next date,” Special CBI Judge OP Saini said, slating September 21 for arguments on the report.
Reliance Telecom Ltd (RTL) and Swan Telecom Private Ltd (STPL), an alleged beneficiary of the scam, have been taking the defence that they were not ‘associate’ firms as RTL’s stake in STPL was below 10 per cent, as mandated under the guidelines for the Unified Access Service (UAS) Licenses. Essar Telecom, which allegedly created Loop Telecom as its front company to get licenses, has taken the same plea.
“No single company/legal person either directly, or through its associates, shall have substantial equity holding in more than one licensee company in the same service area for the Access Services namely: Basic, Cellular and the UAS. ‘Substantial equity’ herein will mean ‘an equity of 10 per cent or more’. A promoter company/legal person cannot have stakes in more than one licensee company for the same service area,” the UASL guidelines said. CBI, on the other hand, has been alleging that STPL was an associate firm of RTL created to circumvent the then guidelines of DoT which debarred existing CDMA players from venturing into GSM segment.
RTL later passed on the control of STPL to promoter and co-accused Shahid Usman Balwa after the DoT allowed it to avail the facility of dual technology, the agency said.
Law Secretary DR Meena, in his report to the DoT, had said the term ‘associate’ could be determined only by applying the ‘share-holding’ test between telecom firms.
“To that extent, they certainly have an ‘association’, but by no means they can be termed as being ‘associates’ of one another, on that ground. The true test, therefore, is to apply the shareholding test,” the report said. However, the names of accused telecom firms did not figure in the Law ministry report. The judge said though CBI was justified in opposing the plea of the accused, the court was asking for the report as the investigators have left the issue to its discretion.
Initially, CBI took the plea that it cannot be forced to bring on record the ‘unsolicited’ opinion of Law ministry as it had no relation with its probe and filing of the charge sheet in the case but later left it to will of the court to place it on record or not.
The court said, “The report is largely legalistic in nature clarifying a law point only. The prosecution is not likely to suffer any prejudice by its production. Accordingly, in the interest of fairness of trial and transparency, I deem it proper that a copy of the said report be placed on record by the CBI.”
Reliance Telecom Ltd (RTL) and Swan Telecom Private Ltd (STPL), an alleged beneficiary of the scam, have been taking the defence that they were not ‘associate’ firms as RTL’s stake in STPL was below 10 per cent, as mandated under the guidelines for the Unified Access Service (UAS) Licenses. Essar Telecom, which allegedly created Loop Telecom as its front company to get licenses, has taken the same plea.
“No single company/legal person either directly, or through its associates, shall have substantial equity holding in more than one licensee company in the same service area for the Access Services namely: Basic, Cellular and the UAS. ‘Substantial equity’ herein will mean ‘an equity of 10 per cent or more’. A promoter company/legal person cannot have stakes in more than one licensee company for the same service area,” the UASL guidelines said. CBI, on the other hand, has been alleging that STPL was an associate firm of RTL created to circumvent the then guidelines of DoT which debarred existing CDMA players from venturing into GSM segment.
RTL later passed on the control of STPL to promoter and co-accused Shahid Usman Balwa after the DoT allowed it to avail the facility of dual technology, the agency said.
Law Secretary DR Meena, in his report to the DoT, had said the term ‘associate’ could be determined only by applying the ‘share-holding’ test between telecom firms.
“To that extent, they certainly have an ‘association’, but by no means they can be termed as being ‘associates’ of one another, on that ground. The true test, therefore, is to apply the shareholding test,” the report said. However, the names of accused telecom firms did not figure in the Law ministry report. The judge said though CBI was justified in opposing the plea of the accused, the court was asking for the report as the investigators have left the issue to its discretion.
Initially, CBI took the plea that it cannot be forced to bring on record the ‘unsolicited’ opinion of Law ministry as it had no relation with its probe and filing of the charge sheet in the case but later left it to will of the court to place it on record or not.
The court said, “The report is largely legalistic in nature clarifying a law point only. The prosecution is not likely to suffer any prejudice by its production. Accordingly, in the interest of fairness of trial and transparency, I deem it proper that a copy of the said report be placed on record by the CBI.”
