Fraud Office Investigating Loop Mobile Shareholders

India's Serious Fraud Investigating Office is reported to have asked the country's Ministry of Corporate Affairs to investigate alleged license violations by Loop Telecom. The investigation follows complaints from a Non-Governmental Organisation (NGO) that the company has two shareholders of unknown nationality.

Loop Telecom, which is already facing a probe by the Ministry of Corporate Affairs, has refuted these allegations.

"The entire shareholding structure of Loop Telecom, including the beneficial ownership of the two companies, has already been provided to DoT together with the certification from the auditors that the shareholding pattern is within the DoT guidelines," a spokesperson of Loop Telecom told the Business Line newspaper.

The company is already under investigation to determine if the Essar Group's holding in the company, reported at less that 10% is effectively higher due to the offer of financial guarantees.

Loop Telecom is controlled by the Essar Group, which also owns 33% of Vodafone Essar and is in legal dispute with Vodafone over its reported plans to use Loop Mobile to build another national mobile network. ZTE recently won a contract from Loop Mobile for a national network rollout - although no specific details were provided.

The rebranding of Mumbai based mobile network, BPL Mobile as Loop Mobile earlier this year heightened speculation that Essar Group is proceeding with its national network plans.

On the web: Business Line

Posted to the site on 10th August 2009