The Ministry of Law and Justice has informed the Department of Telecommunications that a company can be an associate of another only if it is a subsidiary and that two firms can be associates of each other if a parent company owns more than 50 per cent stake in both.
The definition of the term associate is at the core of the charges filed by the Central Bureau of Investigation (CBI) against Swan Telecom and three executives of Reliance Telecom. This charge is based on the CBI’s finding that Swan Telecom had received substantial funding from Reliance Telecom.
The CBI had said that Swan Telecom was an associate of Reliance Telecom, alleging that this violated telecom regulations that prohibit mobile phone companies from holding more than 10 per cent stake in two different operators in the same area.
