2G scam: ICSI shares MCA's view on date for capital enhancement

Print Posted Date : 25-Oct-2011 , 08:25:15 am | Posted By CASANSAAR

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The apex body of company secretaries, ICSI, is likely to endorse the view of Ministry of Corporate Affairs (MCA) on the issue of effective date for enhancement of authorised capital that is crucial in the 2G spectrum scam case.

It is learnt that the Institute of Company Secretaries of India (ICSI) holds the same view as that of MCA's. The ministry considers the date of board resolution should be the effective date for enhancement of authorised capital, a view that is contrary to official auditor CAG and CBI's.

"On a concept basis, the date of board resolution is the date when increased authorised capital becomes effective as prescribed in the Companies Act 2002," an ICSI source said.

The date of increase of authorised capital is significant as it would determine whether the telecom companies, who had obtained 2G spectrum licences in January 2008, were eligible to apply for the radio waves. It was also one of the main reasons for declaring most of the new operators ineligible.

Former Telecom Minister A Raja is in jail for alleged irregularities in distribution of 122 licences for 2G spectrum in 2008.

To seek a third party view point on the matter, which has become a bone contention between CBI, DoT and the MCA, the Law Ministry had asked MCA to consult the ICSI.

The issue of authorised capital gained prominence after official auditor CAG pointed out in its report that 13 applicant companies did not have the requisite capital of minimum Rs 3-10 crore to apply for 2G licences as prescribed by the Telecom Department.

According to the Comptroller of Auditor General (CAG), the date when the Registrar of Companies (RoC) gives its approval for the increase in authorised capital, should be considered as the effective date. The Central Bureau of Investigation (CBI) too have been claiming the same before the court.

However, the MCA has already given a different opinion to the DoT in an earlier communication.

The MCA's view was, however, not considered satisfactory by the investigating agency. The Department of Telecom (DoT) then moved to seek the opinion of the Law Ministry and Attorney General of India on the matter. (PTI)

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