The saga surrounding India’s 2G scam took a fresh twist today when it emerged that Indian conglomerate Essar Group held a stake of just 1.5% in the telco Loop Telecom.
This follows allegations that it had owned a greater stake in the company, which could…
The saga surrounding India’s 2G scam took a fresh twist today when it emerged that Indian conglomerate Essar Group held a stake of just 1.5% in the telco Loop Telecom.
This follows allegations that it had owned a greater stake in the company, which could potentially have contravened Indian law.
An Essar Group spokesperson told TelecomFinance that Essar’s effective shareholding in Loop Telecom when it originally applied for its Unified Access Services (UAS) licence in 2007 was 2.15%.
This subsequently dropped to 1.5% through dilution.
He said: “We have not sold any of our stake and have no intention of increasing our holding in Loop Telecom in the future.”
He also said that Essar Group had always maintained that its stake in Loop Telecom was less than 9.9%.
The figure is significant because of mobile operator Vodafone Essar, the Essar Group’s JV with British telco Vodafone. Essar holds a 33% stake in the JV.
According to the Indian newspaper the Economic Times, Indian law does not allow a company to have a stake greater than 10% in two mobile phone companies.
The Economic Times also reported that both the NGO Telecom Watchdog and an Indian MP from West Bengal, Ajay Chakraborty, have accused Essar of holding a shareholding in Loop Telecom of more than 10%.
