Ministry report details "factual position"; DoT to decide if it was consistent or inconistent with licensing norms
Sweta Ranjan | December 28, 2010
The ministry of corporate affairs (MCA) has submitted its report on Swan Telecom's alleged connection with Reliance Communication (RCom) to the telecom department (DoT). Corporate affairs minister Salman Khurshid told the reporters at a book launch that the ministry has looked into the factual position of the shareholding patterns of Swan Telecom, a company alleged to be a front company of Reliance Communication.
Khurshid said, "Registrar of Companies has got back to us and that information has also been shared with DoT. We were not looking for irregularities, we were looking for factual position. Whether that’s consistent or inconsistent with licensing conditions is for DoT to decide," he said.
Last month, telecom minister Kabil Sibal said DoT would ask MCA to probe the comptroller and auditor general (CAG) allegation that Swan Telecom, which got licences and spectrum in 2008, acted in the interests of RCom.
"I can't tell you the facts as in such and such deal what done at such and such time, but the equity holding...they are all on MCA-21 (the e-index on companies)."
According to a CAG report, Swan Telecom appeared to be acting as a front company for Reliance Telecom, a 100 per cent subsidiary of RCom.
As per the existing rules, no telecom operator is allowed to hold more than 10 per cent stake in another service provider in the same circle, either directly or indirectly.
However, in all 13 circles where Swan bagged licences, Reliance was already present. The CAG has calculated that inclusive of preferential shares equivalent to a 0.9 per cent stake, RCom had a 10.71 per cent participating interest in Swan.
RCom, on the other hand, has maintained that while it held a 9.9 per cent equity stake in Swan through Reliance Telecom till December 5, 2007, it had offloaded the shares prior to the award of a telecom licence to Swan on January 10, 2008.
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