Ravi Ruia

New Delhi, Dec. 12: Essar Group promoters Ravi and Anshuman Ruia were today charged in the 2G case with criminal conspiracy to cheat the exchequer by using Loop Telecom as a front to secure telecom licences.

Similar charges were brought against Loop Telecom promoters, NRI businessman I.P. Khaitan and his wife Kiran, as well as Essar group director Vikas Saraf in the chargesheet, the third to be submitted by the CBI in the case.

Three companies — Loop Telecom Pvt Ltd, Loop Mobile India Ltd and Essar Teleholdings Ltd, the investment arm of Essar Group — have also been named as accused.

A senior CBI officer dubbed Loop Telecom, which got the licences in January 2008 when A. Raja was minister, a “front” company and “alter ego” of the Essar group.

“Ravi Ruia, Anshuman Ruia, Vikas Saraf, I.P. Khaitan and his wife Kiran have been charged with criminal conspiracy to cheat the department of telecom. If convicted, they would face a maximum sentence of seven years,” the officer said.

Today’s filing came almost 10 months after the February questioning of Essar group CEO Prashant Ruia and Sandip Basu, the CEO of Loop Telecom.

The CBI official said Essar held a “substantial” stake in Loop Telecom when the latter applied for the licences. “Loop was the front company of Essar but they did not disclose it to the department of telecom. Under the rules, one telecom firm cannot hold more than 9.9 per cent in another within the same circle while applying for a licence. They misrepresented facts and hatched a criminal conspiracy to cheat the government.”

But the chargesheet filed today is being seen as “less severe” as it does not contain any corruption allegations or criminal breach of trust — punishable with life term. Such accusations have been brought against Raja, DMK MP Kanimozhi and the telecom bosses who are among the 14 named in the earlier chargesheets.

“They (the Ruias and the others) only misrepresented facts to cheat the government and no government officials were involved in showing favours to them. A. Raja had bent rules for Swan Telecom, a front company for Reliance and Unitech and allegedly accepted bribes in return for the favours,” said the CBI official.

Essar denied all charges and declared it would “take legal recourse”. The denial was made in a statement distributed among journalists outside the 2G special court before the CBI had formally filed the chargesheet, raising suspicion the contents had been leaked.

“We would like to reiterate that Essar has complied with all conditions of Clause 8 under UASL (unified access service guidelines dealing with cross-holding) in totality and all the facts which have been given at the time of submitting the application for telecom licence, i.e. shareholding/ownership, have been independently verified by the government agencies,” the statement said.

“Essar has always maintained that it held only 2.15 per cent in Loop during the time of the application and therefore there is no violation of Clause 8. Essar Group is a responsible corporate citizen and has always complied with all government guidelines and the law of the land,” the statement added.

CBI director A.P. Singh had sought advice on the matter from attorney-general G.E. Vahanvati, who favoured filing the chargesheet. But Vahanvati’s opinion was overruled by the then corporate affairs minister and present law minister Salman Khurshid.

In its statement today, Essar pointed out that the agency had decided to charge the company despite the corporate affairs ministry’s views to the contrary. “The CBI and the attorney-general have gone contrary to the opinion given by the ministry of law and justice and the ministry of corporate affairs. The CBI has also gone against their internal legal advice,” the statement said. The term “internal legal advice” alluded to reports that a section of the CBI officers, including the director of prosecution, was not in favour of charging Essar and Loop.

Special 2G court judge .P. Saini said the chargesheet would be “taken for further consideration on December 17”. The chargesheet runs into 105 pages and contains 398 files and documents. The documents were brought to the court in five steel trunks.