CBI doesn’t charge Essar with corruption in the 2G scam

The Central Bureau of Investigations (CBI) on Monday finally filed its third chargesheet in the 2G spectrum scam against the Essar Group and Loop Telecom but did not charge the group with corruption or detail any government official’s involvement.

The chargesheet names three companies —  Loop Telecom Pvt Ltd, Loop Mobile India Ltd and Essar Tele Holding — and five of their top executives as accused under Section 120 B (criminal conspiracy) and 420 (cheating) of the Indian Penal Code.
Unlike the case in the earlier two chargesheets, the one filed on Monday against Essar makes no allegations of corruption against Essar and Loop.

The CBI’s chargesheet runs counter to the opinions given by both the ministry of corporate affairs and the ministry of law and justice that have confirmed that there was no Clause 8 violation of the UASL guidelines, as the CBI has alleged in its chargesheet.

In fact, it contradicts the view of the CBI’s own legal department. Importantly, the Department of Telecom has neither complained of a Clause 8 violation nor of cheating.

“The investigation has established that the said telecom private firm (Loop Telecom) was an ineligible company to get the said (2G spectrum) licences being an associate/front company of another telecom Group /Group of companies (Essar), under a corporate veil,” a CBI press statement said.

Terming the move “unprecedented”, Essar has pointed out that the CBI has proceeded with the chargesheet despite the Government of India giving a clean chit to the two companies.

The group has denied any involvement in the 2G spectrum allocation scam and said it has complied with all conditions. What is clear is that Essar’s stand that it complied with all the government regulations has been completely overlooked by the CBI.

Essar Group said in a statement that “we would like to reiterate that Essar has complied with all conditions of Clause 8 under UASL guidelines (dealing with cross-holding) in totality and all the facts which have been given at the time of submitting the application for telecom licence, i.e, shareholding/ownership have been independently verified by the government agencies.”

“The only charge filed by CBI is regarding the interpretation of a contractual issue,” Essar said, adding that it denies this charge and will take appropriate legal recourse to defend its stand. Essar also says that there is no instance from the past where such interpretation of contractual clause has attracted charges of such a nature.

While the CBI special court judge O P Saini is yet to take cognizance of the chargesheet which will decide whether the case will remain in this court or be referred to the lower courts. Legal experts feel that it is likely that since there are no corruption charges or involvement of government officials, it is likely that this will be referred to another court.