New Delhi: The Ministry of Corporate Affairs (MCA) has given a clean chit to Loop Telecom saying that the company was not an associate of Essar as the Ruias-promoted group had only a 2.15 percent stake in the firm when it applied for the Unified Access Service Licence (UASL) in 2007.
In a letter to the Department of Telecommunications (DoT), the Corporate Affairs ministry said: “The Essar Group, directly or indirectly, held only 2.15 percent of Loop Telecom, as on Sept 3, 2007, the date on which the application was made to DoT for UAS licence.”
The ministry said the documents of companies examined do not substantiate 'associate' relationship between Essar and Khaitan Group and that the Essar group have been a 'net borrower' from the Khaitan Group as on March 31, 2006 and even thereafter, including as on Sept 3, 2007.
As per UASL guidelines dated December 12, 2005, no single company either directly or through its associates, should have substantial equity holding in more than one license company in the same service area for the same service.
The DOT had written to the Ministry of Corporate Affairs in January 2011 seeking their comments whether clause 8 of UASL guidelines regarding substantial equity had been violated in relation to Loop Telecom.
The Central Bureau of Investigation is probing Loop Telecom along with some other new entrants for alleged irregularities in granting licences and spectrum for telecom services.