New Delhi: CBI is likely to advance its arguments on Monday in a Delhi court on a Law ministry report that a firm should have more than 10 percent stakes in another for being termed an associate, a plea taken by 2G scam accused Reliance Telecom and Swan Telecom.
Special CBI Judge O P Saini had earlier asked CBI to place on record the report of the Ministry of Law and Justice given to the Department of Telecommunication on the issue of "associate" companies.
Law Secretary D R Meena, in his report to DoT, had said the term "associate" could be determined only by applying the "share-holding" test between telecom firms.
"It is a common mistake to confuse a mere "association" with a definition of an "associate company". Companies may have common interests, common business strategies, financial dealings, business pacts and understandings. It is common knowledge that in the telecom sector, several companies enter into business arrangements for technical support and strategies like sharing of towers.
"To that extent, they certainly have an "association" but by no means they can be termed as being "associates" of one another on that ground. The true test, therefore, is to apply the shareholding test," the report said.
CBI has been alleging Swan Telecom was an associate firm of Reliance Telecom (RTL) created to circumvent the then guidelines of DoT which debarred existing CDMA players from venturing into GSM segment.
PTI
