Financial Daily from THE HINDU group of publications
Saturday, Jun 08, 2002
Info-Tech - Telecommunications
Tatas may relent on VSNL investment row -- `Final decision today'
NEW DELHI, June 7
THE week-long spat between the Union Communications Minister and Videsh Sanchar Nigam Ltd. (VSNL) is finally drawing to a close, with top officials of the Tata group assuring Mr Pramod Mahajan that they may reconsider the decision to invest Rs 1,200 crore in Tata Teleservices Ltd (TTL).
According to highly-placed official sources, the Tata team, which included Mr Kishore Chauker, MD, Tata Industries Ltd, and Mr N. Srinath, Director (Operations), VSNL, held a two-hour meeting with Mr Mahajan on Thursday to deliberate on the issue. With the Minister sticking by his stand that the investment decision had to be revoked, the Tata group promised to get back with their final decision by Saturday.
Sources noted that Mr Mahajan asked VSNL to convene a board meeting and take up the issue as a fresh item on the agenda. He also made it clear that with the Government being a shareholder in the company, he would be accountable to Parliament if such a huge amount of money were allowed to be invested in a group company of the Tatas.
He also told the Tata team that as long as the interests of all the shareholders were taken into account, he would have no objection to VSNL board decisions. Had the TTL investment decision been to the advantage of VSNL, he would not have opposed the move. But it was seen to be against VSNL's interests and in favour of another group company, he said.
"The Minister has in no way softened his stand against the investment decision. He continues to maintain that it made bad business sense and in no way would strengthen VSNL. He has also asked the VSNL board to be more transparent when it takes up any agenda involving such huge amounts of money," they said.
The sources noted that the meeting convened by the Home Minister, Mr L.K. Advani, between Mr Mahajan and the Minister for Disinvestment, Mr Arun Shourie, was more to discuss the misunderstanding that had cropped up, and not the investment decision per se.
In this context, they pointed out that it was Mr Tarun Das, Director-General, Confederation of Indian Industry, who met Mr Mahajan on June 1, and offered to mediate in the issue. It was Mr Das who had been mediating between the two sides to arrive at a solution, and not the Home Minister as was being widely believed. Why should Mr Advani involve himself in this issue at all, they asked.
When contacted VSNL sources said, "no request from the Ministry has been received for convening a fresh board meeting."
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