New Delhi:  The promoters of Loop Telecom and Essar Group, who had been summoned by the Delhi court hearing the 2G scam, did not appear today. They were represented instead by their lawyers who argued that the Central Bureau of Investigation (CBI), which is probing the case, did not follow the proper procedure while issuing the summons.

Their lawyers argued in court that the CBI should have sent the summons to their Dubai residences since the agency knew that this was where they were staying. The CBI, however, maintained that it had followed the due process and that summons had been sent to their Delhi homes.

Lawyers for Loop and Essar also pointed out that the Delhi High Court was yet to settle the issue of whether the court had the jurisdiction to hear this case.
Ravi Ruia and Anshuman Ruia, promoters of Essar; I P Khaitan and Kiran Khaitan, promoters of Loop Telecom and Vikas Saraf, Director (Strategy and Planning), Essar, along with their companies, were issued summons last month, after the CBI named them in the third chargesheet filed in the case.

They  have been charged with cheating for allegedly using Loop as a front for Essar to secure 2G spectrum and licences in 2008, in violation of the DoT guidelines.

The CBI alleges that in 2008, Essar used Loop as a front to buy more licences and acquire spectrum beyond what was legally permissible. Guidelines forbid a telecom from owning more than 10% stake in another operator that services the same area. In 2008, Essar had a 33% stake in Vodafone, and owned a substantial chunk of Loop, says the CBI. Interestingly, they have only been charged under the Indian Penal Code (IPC), and not under the Prevention of Corruption Act, unlike the other 17 accused in the case.

Loop and Essar have challenged the summons issued to them in the Delhi High Court on the grounds that the special CBI court trying the 2G case does not have the jurisdiction to hear their case.

While admitting their plea, the High Court refused to stay the summons.

Representatives for both companies had confirmed earlier this month that the promoters are currently in Dubai, and say there is no attempt to dodge the legal proceedings against them. CBI sources, however, say the agency may ask for their passports to be cancelled.