CBI to examine Mauritius docs on flow of funds into Loop-Essar

Revisiting the Ministry of Corporate Affairs' letter of April, 2009, the CBI found that the document had not been interpreted in proper context and at no point of time there was an allegation of more than 10 per cent of cross-holding shares of Essar in Loop Telecom other than investments made through Non-Convertible Debentures (NCD) by Ruias.

"... While Essar group is not an equity holder in Santa Trading Private Limited, it has invested a huge amount in its Non-Convertible Debentures and it would appear that through the funding of STPL by the Essar Group, equity has been provided to BPL Communications, who is a 48 per cent owner of Loop Telecom, though not directly through directly to Loop Telecom," the MCA letter of April 13, 2009, had said.

In a fresh letter, the Registrar of Companies (Mumbai) has said that "the Essar Group, directly or indirectly, held only 2.15 per cent of Loop Telecom, as on September 3, 2007, i.e. the date on which the application was made to DoT for UAS licence".

The RoC letter also said that "documents of the company do not substantiate an "associate relationship between Essar Group and Khaitan Group", as alleged.

The agency, which will be finally handed over the documents procured through diplomatic channels from Mauritius, will get them examined by officials of the Ministry of Corporate Affairs and financial experts before deciding on filing a chargesheet on or before July 6, official sources said. The documents sent from Mauritius are understood to have ownership, bank statement and other share movements pertaining to various companies set up by I P Khaitan, the brother-in-law of Essar Telecom CEO Prashant Ruia, in the island nation.

The CBI may now summon Khaitan once again to the agency to record his statement after the documents were received from the Mauritius.

The agency got these documents in response to Letters Rogatory seeking details of business and financial transactions of some of the companies related to Loop and Swan.
The CBI had sought details of Delphi, Apex Fund Services, Maavi Investment Fund, Palab Investments, Capital Global, Black Lion, Inditel Holding, Etisalat, Deccan Asian Infrastructure, Aid-tel Holding, Kaif Investment and Electro Investments, they said.
The CBI had in February quizzed Essar Telecom CEO Prashant Ruia in connection with the 2G spectrum allocation scam. Later his brother-in-law, Khaitan, was also summoned to the CBI, during which he was handed over a questionaire to clear the air about the allegation that Essar had a stake of more than 10 per cent when the company got a licence in telecom circles across the country.

As per the 'substantial equity' clause of the licence, a company can not hold more than 10% in two operating licencees in the same circle.