Reliance cleared of having excessive stakes in rival companies

India’s Ministry of Corporate Affairs has cleared Reliance Communications of allegations that it held more than 10 per cent of Etisalat DB (formerly Swan Telecom), which would be have been a breach of Indian law. Cross shareholdings in rival companies is limited.

The review of the company shareholders came as a result of the investigation into the scandal over the award of telecom licences and whether Reliance had qualified for the licences it won in 2008.

In its report, the ministry said that Reliance had no equity shareholding or voting rights in any of the subsidiary companies that created Etisalat DB. The company was created in 2007 and was granted telecom licences in January 2008, although Reliance did hold a 9.9 per cent equity stake in the firm at the time. Etisalat later took a 45 percent stake in the company.

Reliance is still facing a "show notice" from the regulator to explain why it should not forfeit some of its licences, which it is alleged to have been awarded without the necessary qualifications.