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Clarify what 'associate co' means: DoT tells law min
The Department of Telecom has sought the law ministry's opinion on the definition of the term 'associates' before initiating action against Loop and Swan Telecom.
The Department of Telecom has sought the law ministry's opinion on the definition of the term 'associates' before initiating action against Loop and Swan Telecom. CNBC-TV18's Malvika Jain reports on what the letter says and what does this development mean for the investigations into the 2G scam.
The department has proposed a reference to the law ministry on the meaning of the term 'associate' as the definition is at the heart of the CBI case against Loop Telecom.
The CBI has been contesting the claims of Essar and Reliance Communications saying that both the companies held more than 10% of shares in Loop and Swan when the spectrum was allocated to them, a charge rebutted by both the companies.
Recently, the Ministry of Corporate Affairs had said that neither Essar and Loop nor Reliance Communications and Swan are associates.
DoT, which is examining complaints against Loop Telecom and Swan Telecom relating to the alleged violations of guidelines in grant of spectrum, said the term "associates" was not explained while granting the Spectrum in 2008. "The mobile licence does not define the term 'associate'. It only states that no single company or associate can hold more that 10% in the telecom company," DoT said.
The telecom department has kept action pending against the two companies and a show-cause notice on the violation of 10% holding cap norm can be issued to them only after the law ministry replies.
