Two years after the ministry of corporate affairs (MCA) blew the lid on Essar Group’s role in the 2G scam, triggering a CBI investigation that will likely result in Essar being charge-sheeted, the ministry has now done a volte-face.
Two years after the ministry of corporate affairs (MCA) blew the lid on Essar Group’s role in the 2G scam, triggering a CBI investigation that will likely result in Essar being charge-sheeted, the ministry has now done a volte-face.
The entire CBI investigation against Essar was based on an April 2009 letter of MCA to the department of telecom (DoT), which confirms Essar violated norms. CBI even quoted that letter before the Joint Parliamentary Committee (JPC) probing the 2G scam. But now, the MCA has pulled out a report that almost gives a clean chit to Essar.
In an internal communication, the office of the regional director, western region, MCA, has quoted a report of the Registrar of Companies (RoC), Mumbai, dated April 12. “The Essar Group, directly or indirectly, held only 2.15% of Loop Telecom, as on September 3, 2007, the date on which the application was made to DoT for UASL,” said a note dispatched to the director, inspection & investigation, MCA.
The letter adds that the registrar of companies had examined allegations whether the Khaitan Group had become an “associate” of Essar Group in order to meet UAS licence conditions and had come to the conclusion that: “documents of the companies do not substantiate ‘associate’ relationship between the Essar Group and Khaitan Group.”
However, during a presentation before the JPC, the CBI director quoted an April 13, 2009 communication between the MCA and DoT about the Essar Group. The letter said Santa Trading Pvt Ltd. (STPL) an arm of the Khaitan Group “has operations/ transactions which are substantially controlled or influenced by the Essar Group.”
The CBI director told the JPC that in its letter, the MCA said the “Essar Group held, through its associates, substantial equity holding/economic interest in Loop Telecom. Accordingly the DoT officers proposed issuing show cause notices to the company for termination of its UAS licences for 21 circles.”
A CBI official feigned ignorance about the latest RoC report that the MCA has quoted in its internal communication, saying, “We have not received any such report.” However, an industry insider said: “The fate of the Ruias and Khaitans hangs in balance. If the CBI considers the latest communication from MCA, both will go scot-free.’’
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