Loop said in a statement that it "would send out a message to the global investor community that India is not interested in needless litigation".
NEW DELHI: The Ruias of Essar Group and their relatives, the Khaitans, promoters of Loop Telecom, who have been charged with fraud and conspiracy by the country's top investigating agency, have sought to reach a compromise with the government to end a criminal trial in which they are embroiled.
The company's CEO, Sandip Basu, wrote to Telecom Minister Kapil Sibal on December 12, requesting him to consider compounding the alleged offence so as to avoid unnecessary litigation while adding that the charges it faced were "essentially of a civil flavour and had no element of public interest attached to them". He suggested that the law ministry's view on the proposal be sought.
Loop said the ongoing criminal proceedings were causing "great damage to its reputation and businesses", and it therefore wanted to "compound the alleged offences and put an end to these proceedings".
The term compounding refers to an agreement between the accused and the state to end legal proceedings through payment of a fine or fee. Compounding terminates all criminal proceedings against the alleged offender.
This practice is widely followed, in India and abroad, in case of violation of securities laws.
The Loop Telecom spokesperson said the proposal to the government did not entail any admission of guilt.
"As per the provisions of the CrPC and recent Supreme Court judgements, these charges are capable of being compounded." "The company's request to the government to consider compounding does not amount to admission of any violation. The legal provisions relating to compounding do not have any requirement that a violation be admitted. Loop Telecom and its promoters have also filed claims against the government in various forums, including the TDSAT, and are also pursuing international arbitration under the India-Mauritius investment protection treaty for recovery of investments made by them and are also claiming damages.
Loop Telecom believes that a comprehensive settlement with the government would involve appropriately dealing with these claims as well as with the ongoing criminal trial," the spokesperson added.
A telecom department official said DoT is yet to act on Loop's request that its proposal be sent to the law ministry regarding the legal tenability. Minister of State in the Prime Minister's Office V Narayanasamy said he was not aware of Loop's communication as the telecom department had not forwarded any such letter to the law ministry.
The Central Bureau of Investigation has filed charges against industrialistsRavi Ruia and Anshuman Ruia, promoters of Essar Group; its director for strategy and planning Vikas Saraf; and Loop Promoters IP Khaitan and Kiran Khaitan. CBI had charged the Ruias, Khaitans, Saraf and three telcos - Loop Telecom Pvt Ltd, Loop Mobile India Ltd and Essar Teleholding - of cheating the telecom department to secure mobile permits in 2008.
In CBI's version of events, they had done this by violating a rule, called Clause 8, that bars a telco from holding more than 10 per cent in another.
Ruais-controlled Essar Group owned more than 10 per cent equity stake in Loop Telecom while simultaneously holding 33 per cent in Vodafone Essar, which violated the clause, the probe agency had alleged in the chargesheet.
