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Probe Finds Lanco Didn’t Violate India Solar Program

June 12 (Bloomberg) -- Lanco Infratech Ltd., the second-largest non-state utility in India, is complying with rules on ownership of solar plants, the government said after a report on the company’s shareholdings prompted a ministry investigation.

“We’ve completed the inquiry,” Tarun Kapoor, the joint secretary at the Ministry of New and Renewable Energy, said by phone. “As of now their shareholdings are in compliance.”

Lanco owned convertible preferred shares in companies that won national auctions to build solar projects and the equities can be switched into common stock, Kapoor said. The utility has cut some of the holdings so it will own less than 50 percent of the companies should the shares be converted, he said. Lanco didn’t respond to a phone call and e-mail seeking comment.

The companies that issued the convertibles have established businesses and funds other than those from Lanco, Kapoor said.

The Centre for Science and Environment, a New Delhi-based environmental campaign group, said in a report in February that Lanco created companies to hold projects with 235 megawatts of capacity, or about 40 percent of the generation awarded by the government in India’s first national solar auction. The maximum for any one company, under the auction rules, is 105 megawatts.

Lanco rose 1.7 percent to 13.88 rupees by 1:07 p.m. in Mumbai, paring its decline in the past year to 55 percent.

To contact the reporter on this story: Natalie Obiko Pearson in Mumbai at npearson7@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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