rediff.com: VSNL has not invested in Tata Tele yet: Mahajan

The government on Thursday assured Rajya Sabha that "not a penny" has been invested from VSNL in Tata Teleservices or any other company and the decision to invest Rs 12 billion in TTS is pending recommendations of a committee constituted in consultation with it.

The committee, which comprises government nominee on VSNL's board Y S Bhave and three other members, is scheduled to submit its report by August 15.

Replying to a calling attention motion regarding issues arising out of Videsh Sanchar Nigam board's decision to invest Rs 12 billion in TTS, Communications Minister Pramod Mahajan termed the decision as "a breach of trust by the Tatas" while assuring the House that nothing has gone out of VSNL's reserves till date.

Justifying government's retention of 26 per cent equity in VSNL against the Tatas' 45 per cent, he said "when the government took a conscious decision to retain 26 per cent stake in VSNL, it was because we thought we had a role in it. Our role cannot be diminished."

However, he said the government had no intention of interfering in day-to-day business of VSNL.

Terming the VSNL decision to invest in TTS as hasty, Mahajan said "this is an objection we took up with the VSNL. Rs 12-billion investment cannot be made overnight....the agenda of the VSNL board meeting made no mention of TTS. It only talked of a Rs 12 billion investment in basic services".

Mahajan said VSNL owns 1,230.38 acres of land, of which 773.13 acres was declared surplus and is not included in the divestment deal between the government and the Tatas.

The terms of reference of the committee constituted to evaluate the proposed investment in TTS include deciding on its quantum and valuation besides the tranches and periodicity in which this investment will be made.

Also, in the July 29 board meeting of VSNL, it has been decided to take on record various letters from government director (dated May 29, May 31 and July 25, 2002), "indicating his objections/observations and reservations on the proposal of VSNL for inter-corporate investment up to a level of Rs 12 billion in the equity of an Indian company holding BSO (basic service operators) license".

Tatas paid about Rs 25 billion for 45 per cent in VSNL, including the open offer payout, the minister said while refuting Opposition allegations that the telecom major was "sold for a song".

He denied that VSNL has been divested while it had surplus money, saying the Rs 15-billion reserves of VSNL were accounted for : Rs 8 billion was needed for its ADR/GDR issue, another Rs 2 billion was to be paid to MTNL while another Rs 3 billion was needed for its basic service license.




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