Deora's resignation has 2G connection - Sources

MCA gave " undue favours" to Loop telecom

sweta-ranjan

Sweta Ranjan | July 8, 2011



The rumours that the corporate affairs minister Murli Deora has tendered his resignation is being linked with his ministry's alleged role in giving undue favor to the Loop Telecom (the front company of Essar group).

Sources reveal there are evidences of it and if Deora does not resign, he may may get into troubled waters as it was during his tenure that Loop got a clean chit to be eligible to apply for 2G licence.

The CBI too has submiited before the Supreme Court that the minsitry of corporate affairs (MCA) made efforts to "preempt investigations" into the Essar-Loop association case.

The evidences available with the CBI show that Essar was the majority stake holder of Loop and to obtain the license the company reduced stake to 2.15% just 2 days before the 2G licence application. The CBI believes that Essar changed the shareholding pattern of Loop just two days before license were allotted to disguise the fact that it owned at least 10% in Loop.  According to rules, no company can own more than 10% of another telecom operating in the same circle. Sources also reveal that the eligibility regarding time period of company was also not met by the Loop Telecom.

Further, Essar financed Loop for the unified license application fees and also stood as its corporate guarantee when it applied for a SBI loan for 2G roll out.

There are issues that relate to the sanctioning of loan to the Loop as it allegedly did not meet the criteria to apply for it. Doubts are being raised that unless  Loop was not the front company of the Essar Group, the latter's CEO and CFO would not have actively participated in the process of loop getting the license.

The CBI's status report on 2G also mentions that the MCA leaked its report giving clean chit to Loop to the media to influence the probe. The agency has made it clear that the MCA report is not reliable. Sources say, “The approach of ministry also became dubious after the MCA wrote a letter to the CBI to do the investigation all over again.

About the ministry’s attempt to play the issue down by giving a clean chit MCA Secretary D K Mittal said, “There was a communication gap between the ministry and the CBI which we are trying to sort out”. Minister of state RPN Singh added,” We are helping the CBI in investigation. It will soon be resolved”.

Meanwhile, during the launch of National Voluntary Guidelines on Social, Environmental and Economic Responsibilities in the capital today, Deora dismissed the perception that his resignation is related to 2G. He said, “I have requested Sonia Gandhi to involve me in the party work because now I wish to work for the party and open the way for younger generation.”
 

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