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Bourse seeks VSNL plan details

BS Economy Bureau

In another twist to the controversy surrounding Videsh Sanchar Nigam Ltd, the Bombay Stock Exchange on Wednesday rejected the Tatas' explanation of the company's decision to withhold information from the stock exchange about the proposed sale of stake in Intelsat and Inmarsat.

Sources in the exchange told Business Standard such information was price-sensitive and, as per the listing agreement, had to be disclosed to the bourse.

"The company has violated the listing agreement norms," they maintained. The sources added that any price-sensitive decision taken by the board of a listed company, however small it might be, had to be conveyed to the stock exchange.

Earlier in the day, the BSE shot off a letter to VSNL, seeking an explanation on the proposed divestment of the company's stake in international satellite communication outfits Inmarsat and Intelsat.

VSNL, in its reply, said since the initial public offerings of the two firms were yet to be finalised, "There is no requirement for such information to be communicated on events which are yet to crystallise".

VSNL also said since it had entered into a confidentiality agreement with these satellite companies, spreading news of such nature "would have been financially imprudent on our part and may have led to allegations of manipulation".

The decision to divest VSNL's stake in Inmarsat and Intelsat was taken at the controversial May 28 board meeting, when the decision to invest Rs 12 billion in Tata Teleservices was also taken.

The board had approved authorising Intelsat to sell 75 per cent of VSNL's holding of 5.6 per cent in the company for a floor price of $21, and authorising Inmarsat to sell 100 per cent of VSNL's 2.06 per cent holding for a floor price of $11.

According to VSNL, Rakesh Kumar, the government nominee on the board, had also given his approval to the proposed divestment. The government has, however, refused to comment on VSNL's decision to divest stake in Intelsat and Inmarsat.

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