Loop Telecom, which has been linked with the Ruia-Essar group of companies, has claimed that it has got a clean chit from the Ministry of Corporate Affairs headed by Murli Deora.
The response came in the wake of reports that the CBI is investigating the Ruia family for illegally owning stakes in Loop Telecom.
“It is our understanding that after detailed investigation in this regard, Ministry of Corporate Affairs (MCA) has opined that Essar does not hold substantial equity in Loop and that Loop is not an associate of Essar. All relevant information has already been provided to the authorities and we continue to cooperate with them in full. Loop is and has always been in full compliance with UAS License norms,” it said.
Brothers Shashi and Ravi Ruia (whose initials contributed to the name ESSAR) are accused of illegally owning a telecom license — through lots of intermediary companies based abroad. Under India’s laws, a single company cannot own more than one telecom licenses — 10% or more.
Loop has always maintained that it holds only 9.9% and claimed that the remaining was always with unnamed “financial investors.” Since the holding companies are incorporated outside India, it was so far difficult to find out exactly who owns the shares in Loop Telecom.
Essar also owns 33% of Vodafone Essar, which makes it difficult for the company to hold more than 10% in another company.