They allegedly violated Department of Telecom guidelines

The Central Bureau of Investigation on Monday filed in a special court here its second supplementary charge sheet in the 2G spectrum case implicating five persons, including two members of the family that controls the Essar Group, and three telecom firms.

They had allegedly violated the Department of Telecom (DoT) guidelines that prevented the existing Unified Access Service licence-holding promoter companies from owning over 10 per cent equity holding in another licensee company in the same service area.

The CBI has charged all the eight accused for criminal conspiracy (Section 120B) and to cheat (Section 420 of the Indian Penal Code) the DoT by setting up Loop Telecom as a front company in violation of the norms to illegally obtain additional spectrum despite having substantial stake in Vodafone Essar.

The Essar Group, in a statement, denied the charges.

Among those chargesheeted are Essar Group vice-chairman Ravikant Ruia and promoter-director Anshuman Ruia, Loop Telecom promoters Kiran and I.P. Khaitan, Essar Teleholdings Limited CEO Vikash Saraf, Essar Teleholdings Limited, Loop Telecom and Loop Mobile India Limited.

The CBI said that during its investigation “an allegation surfaced that a Mumbai-based private telecommunication firm, which had obtained 21 UAS licences [Loop Telecom] and 2G spectrum from the DoT in 2008-09, was a front company of another Mumbai-based telecom corporate group [Essar Teleholdings Limited] and was being controlled by it under a corporate veil in violation of Clause-8 of the UASL Guidelines dated December 14, 2005.”

The CBI, in a release, said the investigation has “established that the said telcom private firm [Loop Telecom] was an ineligible company to get the said licences being an associate/front company of another telecom group/group of companies, under a corporate veil.”

398 files, over 20,000 pages

CBI Investigating Officer Vivek Priyadarshi submitted the charge sheet along with 398 files, running into over 20,000 pages, before Special Judge O.P. Saini in five large metal trunks.

There are 100 prosecution witnesses, with four of the witness statements having been recorded under Section 164 of the Criminal Procedure Code, which makes these admissible during trial as evidence.

Mr. Saini said the matter required “further consideration” and deferred a decision on taking cognisance of the charge sheet to December 17. There is a possibility of the case being transferred to the court of a first class magistrate. The offence of cheating carries maximum punishment of seven years' imprisonment and is also triable in the court of a first class magistrate. However, Mr. Saini's court was designated as a special court by the Supreme Court to exclusively hear 2G cases.

The provisions of the Prevention of Corruption Act were also attracted on any of the accused, with the CBI saying it could not find any evidence of DoT officials or any public servant being aware of the alleged violation of Clause 8 by Loop Telecom.

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