Loop Telecom was 'front company' for Essar: CBI to court

CBI on Monday told a special court that Loop Telecom Ltd (LTL) was a "front company" for Essar Tele Holding Ltd (ETHL) to bag 2G spectrum licences in violation of a provision under the Unified Access Services Licences (UASL) guidelines. Advancing the ongoing final arguments in the case, Special public prosecutor Anand Grover said that violation of clause 8 of UASL guidelines by the accused firms was a crucial factor. As per clause 8 of UASL guidelines, "No single company or legal person, either directly or through its associates, shall have 10 percent or more equity holding in more than one licensee company in the same service area for same service." Grover told Special CBI Judge O P Saini that purpose of clause 8 of UASL guidelines was to encourage competition in the telecom sector.

"Clause 8 of UASL guidelines was violated in this case. This (clause 8) was to avoid dominant position of a particular telecom company in a particular service area. The applicant company (LTL) was a front company for ETHL," he alleged.

During the brief arguments, Grover said, "On all count, from whichever way this court will see, clause 8 of UASL guidelines was violated in this case." The ongoing arguments in the case remained inconclusive and would continue on August 5. CBI had earlier told the court that accused firm LTL was "used" by Essar Group of companies to acquire 2G licences by "circumventing" the procedures. Essar Group promoters Ravi Ruia and Anshuman Ruia, Loop Telecom promoters, Kiran Khaitan, her husband I P Khaitan and Essar Group Director (Strategy and Planning) Vikash Saraf are facing trial in the case, along with three telecom firms -- LTL, Loop Mobile India Ltd and ETHL.

The five individual accused, who are out on bail, have denied the charges levelled by CBI.