The department of legal affairs under the law ministry is contemplating seeking the attorney general's opinion on various questions being raised over the Hutch-Essar deal, including whether the transaction violated the Benami Transactions (Prohibition) Act, 1988, and some key sections of the Companies Act.

The department wants opinion on whether the credit support given by Hutchison Telecom to Analjit Singh and Asim Ghosh (who hold 12.26 per cent in Hutch-Essar) can be considered a benami transaction.

Vodafone, which picked up Hutchison's 52 per cent stake in Hutch-Essar, has been facing questions over whether the deal violates various laws, including the 74 per cent FDI cap in the telecom sector, and the Foreign Exchange Management Act (FEMA) and the Companies Act.

The department feels the charges are not free from doubt and need to be examined.

It plans to seen opinion on other issues as well. These include Hutchison Telecom's subscription option to purchase the shares of the Indian companies (of Analjit Singh and Asim Ghosh) any time within years from March 1 2006, and that too at par value.

Since Vodafone or Hutch Telecom have not filed any declaration about holding beneficial interest in the shares of the Indian companies, the department wants to examine if there is a violation of Press Note 5, which allowed telecom operators to increase FDI up to 74 per cent.

The attorney-general will also give opinion on whether the deal violated Section 247 of the Companies Act. Under the Act, the ownership of a company may be determined by finding out the persons who are financially interested in the company and are able to control or materially influence its policy.

The issue under the scanner is whether Vodafone can be said to have the holdings of the two Indian companies (Analjit and Asim) on the ground that it is financially interested in those companies and is able to materially influence their policy.

Opinion is also expected to be sought on whether the shareholding of 12.26 per cent which has been declared by Hutch-Essar as "aggregate Indian holdings" can be construed to be so.

This question has been raised as in the filing by Hutch Telecom in the US Securities Exchange Commission, this 12.26 per cent stake was shown as consolidated with the 52 per cent bought directly by Vodafone.