Reliance Telecom and Swan Telecom Private Ltd, an alleged beneficiary of the scam, have been taking the defence that they were not 'associate' firms as RTL's stake in STPL was below 10%, as mandated under the guidelines for the Unified Access Service licenses
New Delhi: The Central Bureau of Investigation (CBI) was today directed by a Delhi court to file law ministry report which said that a firm should have more than 10% stake in another for being termed an 'associate', a plea taken by the second generation (2G) scam accused Reliance Telecom and Swan Telecom, reports PTI.
"It is ordered that the CBI would place a copy of the report received by it from ministry of law and Justice through Department of Telecommunication (DoT) on record on 21st September, the next date of hearing," special CBI judge OP Saini said.
Reliance Telecom (RTL) and Swan Telecom Private Ltd (STPL), an alleged beneficiary of the scam, have been taking the defence that they were not 'associate' firms as RTL's stake in STPL was below 10%, as mandated under the guidelines for the Unified Access Service (UAS) licenses.
Essar Telecom, which allegedly created Loop Telecom as its front company to get licenses, has taken the same plea.
"No single company/legal person either directly, or through its associates, shall have substantial equity holding in more than one licensee company in the same service area for the Access Services namely: Basic, Cellular and the UAS.
'Substantial equity' herein will mean 'equity of 10% or more'. A promoter company/legal person cannot have stakes in more than one licensee company for the same service area," the UASL guidelines said.
CBI, on the other hand, has been alleging that STPL was an associate firm of RTL created to circumvent the then guidelines of DoT which debarred existing CDMA players from venturing into GSM segment.
RTL later passed on the control of STPL to promoter and co-accused Shahid Usman Balwa after the DoT allowed it to avail the facility of dual technology, the agency said.
Law secretary DR Meena, in his report to the DoT, had said the term 'associate' could be determined only by applying the 'share-holding' test between telecom firms.
"It is a common mistake to confuse a mere 'association' with a definition of an 'associate company'. Companies may have common interests, common business strategies, financial dealings, business pacts and understandings. It is common knowledge that in the telecom sector, several companies enter into business arrangements for technical support and strategies like sharing of towers.
"To that extent, they certainly have an 'association', but by no means they can be termed as being 'associates' of one another, on that ground. The true test, therefore, is to apply the shareholding test," the report said.
However, the names of accused telecom firms did not figure in the report of the law ministry.
The judge said though the CBI was justified in opposing the plea of the accused, the court was asking for the report as the investigators have left the issue to its discretion.
Initially, the CBI, during the arguments, took the plea that it cannot be forced to bring on record the 'unsolicited' opinion of the law ministry as it had no relation with its probe and filing of the charge sheet in the case.
Later, CBI took a u-turn saying "we leave it to the discretion of the court. It is not a relied upon document.
However, we have no objection, if court wants it."
"The report 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 transparency, I deem it proper that a copy of the said report be placed on record by the CBI," the court said.
The court said in the interest of justice, the report be placed on its record.
"The case is still at the initial stage of arguments on framing of charges. The instant case is a case of grave magnitude with unimaginable allegations of corruption. It is trite to remark that justice should not only be done but should also be seen to have been done," it said.
It would now hear arguments on the law ministry report on 21st September on behalf of the CBI and various accused and after that the order on framing charges could be pronounced against 17 persons including former telecom minister A Raja and DMK MP Kanimozhi.
Nifty may reach the level of 5,300
Defying global events, the market notched good gains on the back of buying by institutional investors. The Nifty made a seven-day intra-day high (including today) at 5,150. The index has been able to reach at more or less the same level at which the three-day uptrend (ending 8 September 2011) was halted. If the Nifty is able to open in the positive tomorrow and is able to sustain itself above 5,169, then this uptrend may continue. Following this, we may see the Nifty reaching the level of 5,300. The National Stock Exchange (NSE) saw a volume of 53.67 crore shares traded.
The domestic market opened higher today after a 1% loss on Monday, despite a negative closing on the US market overnight and a lacklustre opening in Asian markets this morning. The Nifty added 11 points to open trade at 5,043 and the Sensex rose by 24 points to 16,769 at the opening bell. Early gains were supported by IT and consumer durables sectors.
The opening figure on the Sensex was its intra-day low, while the Nifty fell to the day's lows soon after with the index touching 5,035. Across-the-board buying pushed the indices further northwards as trade progressed. The market touched the day's high at the fag end of the trading session with the Nifty at 5,150 and the Sensex scaling 17,135. The indices closed a tad below those levels. At the close, the Nifty gained 108 points at 5,140 and the Sensex conquered the 17,000 mark again, to settle at 17,099, a jump of 354 points.
The advance-decline ratio on the NSE was 1155:525.
While the Sensex closed with splendid gains, the broader indices were a bit slow in catching up. The BSE Mid-cap index gained 0.90% and the BSE Small-cap index advanced 1.23%.
All-round buying resulted in all sectoral indices closing in the positive. The leaders were BSE IT (up 3.23%), BSE TECk (up 2.79%), BSE Consumer Durables (up 2.74%), BSE Bankex (up 2.31%) and BSE Metal (up 1.97%).
Hindalco Industries (up 4.31%), TCS (up 3.94%), State Bank of India (up 3.78%), Reliance Industries (up 3.73%) and DLF (up 3.46%) were the top gainers on the Sensex. The losers were ONGC (down 2.86%) and BHEL (down 0.81%).
Key stocks that led the Nifty higher were Reliance Capital (up 5.27%), Reliance Power (up 5.01%), Cairn India (up 4.83%), TCS (up 4.51%) and Reliance Communications (up 4.32%). The main Nifty losers were ONGC (down 2.76%), BHEL (down 0.60%), BPCL (down 0.10%), Hero MotoCorp (down 0.05%) and Ranbaxy (down 0.02%).
Markets in Asia capped their gains following news that Standard & Poor's had downgraded Italy's sovereign credit rating by a notch to 'A/A-1'. The downgrade, along with lingering fears over a potential Greek default, pulled down shares in the financial sector. This apart, a media report stated that Bank of China, a leading player in China's foreign exchange market, has stopped foreign exchange forwards and swaps trading with several European banks due to the unfolding debt crisis in Europe.
The Shanghai Composite gained 0.41%, the Hang Seng rose 0.51%, the Straits Times climbed 0.86%, the Seoul Composite advanced 0.94% and the Taiwan Weighted added 0.16%. On the other hand, the Jakarta Composite shed 0.08%, the KLSE Composite lost 0.18% and the Nikkei 225 declined 1.61%.
Back home, institutional investors-both foreign and domestic-were net sellers in the equities segment on Monday. While foreign institutional investors sold stocks worth Rs166.21 crore, domestic institutional investors offloaded stocks worth Rs37.50 crore.
Subex, a leading global provider of business support systems for communications service providers, today announced the signing of an asset purchase agreement with NetCracker for sale of its activation business. The decision to sell the activation business is an outcome of a change in the company's strategy to focus on its core products, ROC Solutions (revenue assurance, fraud management, partner settlement, data integrity management, etc) and managed services, the company said. Subex settled at Rs48.60 on the NSE, up 3.51% over its previous close.
IT services major HCL Technologies today said it will establish a software delivery centre in Dublin, Ireland, that will create 80 jobs for IT graduates over three years. With this centre, HCL will service a growing number of HCL clients and prospects in the financial services, insurance and healthcare/pharmaceutical industries. The stock jumped 2.73% to close at Rs403.05.
The Mint business newspaper reported today that the Central Bureau of Investigation (CBI) is mulling filing a case against Reliance Industries (RIL) over alleged favoured treatment for its operations of gas blocks in the Krishna Godavari (KG) basin. The agency is checking whether penalties for failing to meet commitments were reduced, if state-run companies were forced into rig-sharing arrangements favourable to RIL and whether officials favoured the company in allowing it to raise capital expenditure for the KG block. Despite the news, the stock gained 3.72% to close at Rs852.10.
While the ban on exports had an instant impact in bringing down the wholesale prices of the onions by Rs2-Rs5 per kg in Delhi, the decision had triggered protests from farmers in the key producing regions of Maharashtra and Karnataka
New Delhi: Faced with protests from farmers, the government today decided to lift the ban on onion exports. The decision to permit shipment of onions was taken by the Empowered Group of Ministers (EGoM) on Food headed by finance minister Pranab Mukherjee, reports PTI.
"Ban on onion export has been lifted," Union minister for science and technology Vilasrao Deshmukh told reporters while emerging from the meeting.
Those who attended the crucial meeting included agriculture minister Sharad Pawar and food and consumer affairs Minister KV Thomas.
The government had imposed a ban on onion exports on 9th September to check its spiralling prices which touched Rs25 a kg in retail in the national capital.
The Minimum Export Price (MEP) on onions has been fixed at $475 per tonne, the same level when the government decided to prohibit the shipment of onion, Mr Deshmukh said.
"The situation will be reviewed after a fortnight," he said.
While the ban on exports had an instant impact in bringing down the wholesale prices of the onions by Rs2-Rs5 per kg in Delhi, the decision had triggered protests from farmers in the key producing regions of Maharashtra and Karnataka.
Farmers in Nashik district and Bangalore had refused to bring their produce to markets protesting the drop in their profit level due to ban on onion export.
The farmers' agitation forced the government to take a fresh look on the onion export ban.