<p>"We are referring (Swan Telecom) to the Ministry of Corporate Affairs to actually find out and investigate if there are any front companies involved," Telecom Minister Kapil Sibal told reporters here.<br /><br />"And if we find, pursuant to that investigation, that there was any wrong-doing, we will take action," he added.<br /><br />According to a report by the Comptroller and Auditor General (CAG), Swan Telecom appeared to be acting as a front company for Reliance Telecom, a 100 per cent subsidiary of RCom.<br /><br />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.<br /><br />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.<br /><br />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.</p>
<p>"We are referring (Swan Telecom) to the Ministry of Corporate Affairs to actually find out and investigate if there are any front companies involved," Telecom Minister Kapil Sibal told reporters here.<br /><br />"And if we find, pursuant to that investigation, that there was any wrong-doing, we will take action," he added.<br /><br />According to a report by the Comptroller and Auditor General (CAG), Swan Telecom appeared to be acting as a front company for Reliance Telecom, a 100 per cent subsidiary of RCom.<br /><br />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.<br /><br />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.<br /><br />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.</p>