Govt has given us clean chit: Loop Telecom

Loop Telecom said the corporate affairs ministry has given it clean chit, ruling the company was not an associate of Essar, which had only 2.15 per cent stake in the company when Loop obtained a license in 2007. 'The Essar Group, directly or indirectly, held only 2.15 per cent of Loop Telecom, as on Sept 3, 2007, the date on which the application was made to DoT for Unified Access Service licence,' read the ministry's letter, reports CIOL.

The ministry said the documents of companies examined do not substantiate "associate" relationship between Essar and Khaitan Group, and that the Essar Group has been a "net borrower" from the Khaitan Group as of March 31, 2006, and even thereafter, including as on Sep 3, 2007.

"The Essar Group, directly or indirectly, held only 2.15 per cent of Loop Telecom, as on Sept 3, 2007, the date on which the application was made to DoT (department of telecom) for Unified Access Service (UAS) licence," read the ministry's letter, dated April 2011, to the telecom department.

As per UASL guidelines dated Dec 12, 2005, no single company, either directly or through its associates "shall have substantial equity holding in more than one licencee company in the same service area for the same service." The department of telceom had written to corporate affairs ministry in January 2011, seeking its comments whether the clause 8 of UASL guidelines regarding substantial equity has been violated in relation to Loop Telecom.