In a written reply to the Lok Sabha, R.P.N Singh, Minister of State for Corporate Affairs has said that the Ministry of Corporate Affairs had received a complaint against Reliance Communications (RCOM) for its dealings with Singapore-based Gateway Net Trading, but did not uncover any violation of the Companies Act.
Further, he said that the Ministry has referred the issues of alleged violation of the provisions of the Foreign Exchange Management Act (FEMA) and non-payment of telecom licence fee to the Reserve Bank of India (RBI), the Enforcement Directorate (ED) and the Department of Telecommunications (DoT).
He said the complaint alleges that RCOM had circumvented the provisions of FEMA Regulations by de-subsidising Gateway Net Trading, in March 2008, by reducing its own holding by 91 per cent.
Singh added, “Subsequently, the shares of the said company were acquired through a foreign subsidiary of RCOM, namely Reliance Globalcomm BV, the Netherlands in October 2008. This made Gateway Net Trading a 100 per cent subsidiary of Reliance Communications.?
