2G court allows law ministry opinion on ‘associate’

2G court allows law ministry opinion on ‘associate’

New Delhi: The special court hearing the 2G (second generation) spectrum allocation case said on Monday that it would allow the recent opinion of the ministry of law and justice on ‘associate companies’ to be placed on the record, a decision that could weaken the prosecution’s case.

“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 the CBI (Central Bureau of Investigation)," ruled Judge O. P. Saini.

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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.

The ministry’s opinion on the definition of an associate company is in favour of Swan Telecom (now Etisalat DB Teleservices India Pvt. Ltd), Reliance Telecom Ltd, 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 a 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, with the approval of law minister Salman Khurshid, varies from that 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.

Similarly, CBI was contemplating a chargesheet against Loop Telecom and the Essar group for violating telecom licence rules.

To be sure, 2G special court Judge O.P. Saini has not taken a view on the law ministry report 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 framing of charges last week, but this was delayed after the ministry’s opinion surfaced.