June 10, 2002 | 1617 IST
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Money > PTI > Report June 10, 2002 | 1617 IST |
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VSNL to go ahead with Tata Tele investmentTatas on Monday appeared to have convinced the Centre of the merits of the controversial decision by Videsh Sanchar Nigam Ltd to invest Rs 12 billion in Tata Teleservices even as it agreed to take a government nominee in the board committee that would decide on periodicity and valuation issues. After protracted negotiations over the investment decision, which snowballed into a major controversy with Communication Minister Pramod Mahajan threatening legal recourse if the board did not review its decision of May 28, VSNL and Department of Telecom said in a joint statement that they had reached an agreement. When contacted, spokesperson of VSNL, who issued the statement said: "As far as we are concerned, the decision to invest upto Rs 12 billion is not under review. There is no dilution of May 28 decision to invest upto Rs 12 billion in Tata Teleservices by VSNL." Earlier in the day, Mahajan, who had questioned the ethics of the Tatas about the decision to invest in a company whose future was not known, said in Hyderabad that the issue between government and Tatas had been resolved and a joint statement would be issued. The statement said "as per the understanding, the committee already established by the board will study and decide the quantum and the valuation/price at which the investment would be made by VSNL in Tata Tele at various points of time. "It will also decide the tranches and periodicity of investment in Tata Tele. The committee will include a government nominee director, Y S Bhave, and will complete its deliberations by August 15, 2002," it said. According to sources, VSNL has written a letter to DoT saying that a resolution incorporating government's suggestions would be circulated soon. The two sides (Government and Tatas) had come to the negotiation table after Confederation of Indian Industry director general Tarun Das wrote a letter to Mahajan urging him to resolve the matter through a dialogue and had offered himself as a mediator. Earlier, VSNL had justified the decision to invest in Tata Teleservices saying VSNL required a subscriber base in this deregulated telecom market and had subsequently refused to review the decision. In fact, VSNL had also indicated that they would be looking at similar investments in companies having no conflict with VSNL's interests. ALSO READ:
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