New Delhi: A special court of the Central Bureau of Investigation (CBI) on Friday charged Ravi Ruia and Anshuman Ruia of the Essar Group and I.P. Khaitan and Kiran Khaitan of Loop Telecom Pvt. Ltd with having entered a criminal conspiracy with the intention of cheating the government during the allocation of second-generation (2G) spectrum and licences in 2008.
A fifth suspect, Essar Group director (strategy and planning) Vikash Saraf, was charged with cheating. The court granted bail to all five accused, but asked them to surrender their passports.
The framing of charges by the special court of justice O.P. Saini, who is presiding over the 2G scam case, paves the way for the trial of the five accused, which will commence on 27 July.
Ravi Ruia, one of India’s wealthiest persons, is vice-chairman of Essar, and Anshuman Ruia, his nephew, is a director. Kiran Khaitan is the sister of Essar Group founders Shashi Ruia and Ravi Ruia. She is also the wife of I.P. Khaitan. The Khaitans are promoters of Loop Telecom. The Ruias and the Khaitans are non-resident Indians, but hold Indian passports.
In the second chargesheet filed in the 2G scam case on 13 December, CBI charged the Ruias and the Khaitans with using Loop Telecom to apply for licences and spectrum even as they held and controlled 33% of Vodafone Essar Ltd (now Vodafone India Ltd). The agency contends that this was in violation of telecom licence guidelines because it was anti-competitive in nature.
The five have been charged with violating clause 8 of UASL (unified access services licence) guidelines. They were booked under sections 120B (conspiracy) and 420 (cheating) of the Indian Penal Code.
Under clause 8, a company with a telecom licence cannot hold more than 10% equity in another firm with a telecom licence in the same area of operations. Loop Telecom was awarded 21 licences in January 2008.
A lawyer for Essar said the charges were unfounded.
“The charges framed relate only to interpretation of clause 8, which is a contractual dispute and has been wrongly made out to be a criminal offence,” the lawyer, Mahesh Agarwal, said in response to queries from Mint. “The court has framed a charge of cheating against one executive, and charge against the promoters is only of conspiracy. We firmly believe these charges cannot be established in the trial.” There was no comment from Loop Telecom.
Mint’s Sahil Makkar says the CBI court has charged promoters of Essar and Loop telecom in the 2G case, trials for which will commence on 27 July
Justice Saini said Saraf had got “false representations” made to department of telecommunications (DoT) officials to the effect that Loop Telecom was in compliance of clause 8 of the UASL guidelines and misled them into issuing letters of intent, signing of UASLs and allocating spectrum.
The allegation against the accused is that they “concealed the actual stakeholders of Loop Telecom behind a complex corporate veil” to get new licences. They misled DoT into believing that the Essar Group had less than 10% equity in Shippingstop.com (India) Pvt. Ltd, now known as Loop Telecom.
CBI has also named Loop Telecom, Loop Mobile India Ltd and Essar Teleholdings Ltd as accused in the case for allegedly violating clause 8. But unlike in its first chargesheet, CBI did not find any quid pro quo between Essar, Loop and officials of DoT.
In its first chargesheet, CBI had filed charges of corruption and criminal conspiracy against former telecom minister A. Raja, former telecom secretary Siddharth Behura and Raja’s then personal secretary R.K. Chandolia; Reliance Group executives Gautam Doshi, Surender Pipara and Hari Nair; Unitech Ltd managing director Sanjay Chandra; Swan Telecom (now Etisalat DB Telecom India Pvt. Ltd) promoters Vinod Goneka and Shahid Usman Balwa; and their colleagues Asif Balwa and Rajeev Aggarwal.
Dravida Munnettra Kazhagam (DMK) member of Parliament K. Kanimozhi, DMK-run Kalaignar TV managing director Sharad Kumar, and Mumbai film-maker Karim Morani were also accused in the first chargesheet. The accused were arrested, but now are all out on bail.