The Ministry of Corporate Affairs has reiterated its stance that legal opinion must be obtained to ascertain if the definition of an associate company is applicable when interpreting the norms which debar operators or their subsidiaries, from holding more than 10 per cent stake in two different operators.
Prior to this, the Ministry had told the Department of Telecommunications (DoT) that the definition of an associate varied according to situations.
It said that the definition is provided in different ways in different guidelines as per the requirement of that particular guideline.
The Ministry had sent a similar communication to the Central Bureau of Investigation (CBI), after the latter had sought the Ministry’s opinion on the definition of an associate, with respect to Swan and Loop.
The CBI had wanted to know whether by being associates, these companies had violated existing cross-holding norms.
In its response, the Ministry had stated that Swan and Loop were not associates of Reliance Telecom and the Essar Group, respectively, under the Companies Act.
