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Govt to probe whether Swan was front for RCom

Govt to probe whether Swan was front for RCom
PTI
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First Published: Mon, Nov 29 2010. 07 28 PM IST
Updated: Mon, Nov 29 2010. 07 28 PM IST
New Delhi:Government on Monday said it will ask ministry of corporate affairs to investigate the Comptroller and Auditor General (CAG) allegation that Swan Telecom, which got licences and spectrum in 2008, acted as a front company of Anil Ambani-led RCom.
“We are referring (Swan Telecom) to the ministry of corporate affairs to actually find out and investigate if there are any front companies involved,” telecom minister Kapil Sibal told reporters in New Delhi.
“And if we find, pursuant to that investigation, that there was any wrong-doing, we will take action,” he added.
According to a report by the Comptroller and Auditor General (CAG), Swan Telecom appeared to be acting as a front company for Reliance Telecom, a 100% subsidiary of RCom.
As per the existing rules, no telecom operator is allowed to hold more than 10% stake in another service provider in the same circle, either directly or indirectly.
However, in all 13 circles where Swan bagged licences, Reliance was already present. The CAG has calculated that inclusive of preferential shares equivalent to a 0.9% stake, RCom had a 10.71% participating interest in Swan.
RCom, on the other hand, has maintained that while it held a 9.9% equity stake in Swan through Reliance Telecom till 5 December, 2007, it had offloaded the shares prior to the award of a telecom licence to Swan on 10 January, 2008.
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First Published: Mon, Nov 29 2010. 07 28 PM IST
More Topics: 2G | 2G Scam | Telecom | Spectrum | Swan |