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2G cases: Court acquits Loop, Essar promoters

IANS | New Delhi |

A court hearing the 2G scam case on Thursday acquitted DMK chief M Karunanidhi’s wife Dayalu Ammal and Essar and Loop promoters in two different cases related to the 2G spectrum allocation, besides former Telecom Minister A. Raja and DMK MP Kanimozhi.

“I have absolutely no hesitation in holding that prosecution has miserably failed to prove any charge against any of the accused. Consequently, all accused are entitled to be acquitted and are accordingly acquitted,” said Central Bureau of Investigation (CBI) Special Judge O.P. Saini.

The court acquitted Essar Group promoters Ravi Ruia and Anshuman Ruia, Essar Group director (strategy and Planning) Vikas Saraf and Loop Telecom promoters I.P. Khaitan and Kiran Khaitan.

Observing that the “prosecution has not been successful in proving the offence of conspiracy to cheat Department of Telecommunications”, it also acquitted three companies Loop Telecom, Loop Mobile India and Essar Tele Holding.

The third set of charges filed by the CBI in the 2G case alleged that the promoters of Essar Group were the real investors and beneficiaries of the spectrum and licences issued to Loop Telecom, which was used as a front company by the Essar Group to acquire the 2G licences and spectrum in 2008.

The court observed that prosecution has failed to prove that Loop Telecom Ltd was a company of Essar group or was substantially controlled by it and as such, it was not eligible to apply for Unified Access Services (UAS) licences and there was no material on record to show that the applications for 21 UAS licences were filed at Saraf’s instance or the Ruias or Khaitan was involved in the filing of applications.

“There is no evidence that Essar group was in control of Loop Telecom Ltd accept the fact that on the date of applications for UAS licences, that is, on September 3. 2008, it held non­convertible debentures of Swan Telecom (STPL) to the tune of Rs 1,592 crore,” the court said, adding that “there is no evidence on record that the transactions were not genuine or were sham or circuitous aimed at controlling Loop Telecom by Essar.

The evidence is on record that Khaitan owns his own group of companies known as “Khaitan group” and it is separate and independent from Essar group, the court said adding that “evidence is almost crystal clear and the same is against the prosecution.”

In a statement, an Essar spokesperson said: “We are thankful to the Hon’ble Court for the judgement since it vindicates our stated position, and the court has accepted it.”

In another case related to money laundering, the court acquitted 19 accused including Raja and Kanimozhi.

The court observed that money laundering case lodged by Enforcement Directorate was entirely based on the CBI charge sheet, particularly in respect of generation of “proceeds of crime”, and citing the acquittal in CBI case, said: “In view of acquittal of accused in the case relating to scheduled offence, there are no proceeds of crime.”

“Proceeds of crime is the foundational fact for the offence of money ­laundering. Since there are no ‘proceeds of crime’, there can be no offence of money ­laundering, as nothing remains to be laundered.

“Thus, the very base of the instant case is gone and the alleged offence stands wiped out,” it said.

Kanimozhi with Raja, Swan telecom promoters Shahid Usman Balwa and Vinod Goenka, Kusegaon Fruits and Vegetables Pvt. Ltd. directors Asif Balwa and Rajiv Agarwal, Bollywood producer Karim Morani, Dayalu Ammal, Kalaignar TV director Sharad Kumar and P. Amirthan were charges sheeted by the Enforcement Directorate in the case.

The companies named in the case are Swan Telecom Pvt Ltd, Kusegaon Realty Pvt. Ltd., Cineyug Media and Entertainment Pvt. Ltd. (Cineyug Films), Kalaignar TV (KTV) Pvt. Ltd., Dynamix Realty, Eversmile Construction Company Private Limited, Conwood Construction and Developers (P) Ltd., DB Realty Ltd. and Nihar Construction Pvt. Ltd.

The accused have been booked under various sections dealing with the Prevention of Money Laundering Act (PMLA).

The ED said that amount of Rs 200 crore was paid by STPL’s promoters, using their group entity Dynamix Realty, to KTV, through KFVPL and Cineyug Films in the garb of the legitimate financial transaction, that is as loan/share application money.

The payment was illegal gratification for and on behalf of Raja and his associates in lieu of illegal favours given to the STPL for grant of UAS licence, it has been contended.