The Ministry of Corporate Affairs (MCA) has told the Enforcement Directorate that it has not come across any violation of the provisions of the Companies Act by the telecom companies embroiled in the 2G scam.

The 12 companies named by the MCA include Unitech Ltd, Videocon Telecommunications, Loop Telecom, Etisalat DB, STel, Tata Teleservices, Virgin Mobile, Idea Cellular and Sistema Shyam.

The Ministry has, however, added that this should not be construed as a clean chit to these companies and other agencies should investigate further.

The Enforcement Directorate (ED) is investigating these companies under the provisions of the Prevention of Money Laundering Act in relation to the 2G spectrum scam. In May, the ED had written to the MCA asking if any of these companies have been found in contravention of the provisions of the Companies Act. The ED's query was based on a report of the Comptroller & Auditor General, which had said that most of the companies that got 2G licences in 2008 did not meet the eligibility criteria laid out by the Department of Telecom.

Keeper of records, not a regulator

In response to the ED's letter, an internal MCA note stated that the Ministry had not scrutinised these companies and, therefore, the violation of any of the provisions of the Company's Act, 1956, has not come to light. The Ministry added that it has sent its views to the DoT for action.

Explaining its position, a senior MCA official told Business Line , “The Ministry of Corporate Affairs is a keeper of records and not a regulator of companies. MCA did not scrutinise these companies because we did not have any order to do so. Our actions should not be perceived as giving a clean chit to any company as we are not authorised to give it. It is the ED and other agencies' jobs and they should investigate matters, not us.”

Related Topics