New Delhi: The special court hearing the 2G (second-generation) telecom spectrum allocation case on Monday directed the Central Bureau of Investigation (CBI) to place on record the recent opinion of the ministry of law and justice on “associate companies”, a decision that is likely to bolster the defence and weaken the prosecution.
“The report (of the law ministry) is largely legalistic in nature clarifying a law point only. The prosecution is not likely to suffer any prejudice by its production. Accordingly, in the interest of fairness of trial and its transparency, I deem it proper that a copy of the said report be placed on record by CBI,” judge O.P. Saini ruled on Monday.
Shahid Balwa, promoter of Etisalat DB Telecom India Pvt. Ltd and an accused in the case, had moved the court last week seeking that the document be allowed to become part of the case files, while CBI’s special public prosecutor Uday U. Lalit opposed the move.
Lalit argued that the law ministry’s opinion was “unsolicited” and that it would not be proper to allow this because CBI had already framed its chargesheet based on a different definition. It is not one of the “relied upon documents”, he had argued.
Defence lawyers for Balwa and others have since argued that the document must be placed on record in the interest of a fair trial.
The ministry’s opinion on the definition of an associate company is in favour of Swan Telecom (now Etisalat DB Telecom India), Reliance Telecom, Loop Telecom and the Essar Group.
According to the law ministry’s definition, for one company to be considered an associate of another, “there must be either a holding and subsidiary relationship between the two companies, or there must be more than 50% shareholding in both companies by the common parent holding shares in either of the two companies. In the absence of these facts, one company cannot be said to be an associate of the other company”.
The opinion, drafted by law secretary D.R. Meena on 30 August, with the approval of law minister Salman Khursheed, differs on the definition of associate companies from the one used by CBI to chargesheet Swan and Reliance. According to CBI’s chargesheet and officials investigating the case, Swan was used as a front for Reliance Telecom to get additional telecom licences. This was in violation of telecom licence rules as Swan was an “associate” company of Reliance, according to CBI.
To be sure, judge Saini has not taken a view on the law ministry opinion yet, having merely allowed it to become part of the case record. Defence counsel will now argue against the framing of charges afresh. The court was expected to pronounce its verdict on the framing of charges last week, but this was delayed after the ministry’s opinion surfaced.
“It is also apparent from the record that this document was not created/generated at the instance of CBI. This document came into existence after the filing of the chargesheet,” observed Saini in his order.
“As such, this document is wholly foreign to the investigation/chargesheet of the case. CBI is obliged to place on record only those documents which are proposed to be relied upon by it or which came into its possession during investigation,” said Saini, noting that CBI could not be “forced” to place such documents on record. “If this trend is allowed, then interested parties would always try to favour an accused by obtaining opinions/documents from numerous, maybe questionable, sources.” Saini said such practices could “mislead” the trial and may lead to “subversion of (the) judicial process”.
But noting that “justice should not only be done, but should also seen to be done”, the judge asked that the opinion be placed on record.
CBI is contemplating a similar chargesheet against Loop Telecom and the Essar Group for violating telecom licence rules, but in the light of the new opinion, this might not happen.
Essar controlled Loop
A senior official in the Essar Group, Somasundaram Subramanium, has told a magistrate that the company controlled Loop Telecom when it applied for telecom licences and spectrum, according to the Press Trust of India.
“The financing for the licence fee requirements for LTPL (Loop Telecom Pvt. Ltd) were arranged along with bank guarantees by the corporate finance team of Essar led by V.G. Raghavan, who was the Essar Group CFO (chief financial officer) at that time. I was also aware that corporate guarantees were issued for this facility to the bank by Essar Steel and Essar Power,” Subramanium said.
He said directors V. Ganeshan, Girish Sathe and Madan Mundra were present at the July 2007 Loop board meeting when the resolution that the company will apply for 21 unified access licences was passed.
Subramanium said to the best of his knowledge, these three directors were employees of Essar.
The 2G spectrum case will be heard over the next three days, while arguments on the opinion will continue simultaneously in the special court. The Supreme Court is monitoring CBI’s investigation of the 2G case.
The companies involved were not immediately available for comment.
PTI contributed to this story.