DoT panel to look into VSNL sale

The Department of Telecommunications (DoT) has decided to set up a high-level committee to investigate the divestment procedure of Videsh Sanchar Nigam Ltd (now Tata Communications) in 2002.

The panel headed by the Additional Secretary, Technical, will probe whether the process that had been followed was transparent and fair and will submit its report by March 31.

The committee is expected to find out whether the decision of demerger of the 773-acre land was taken keeping in mind the interest of investors and the government.

That Tatas had put the highest bid to take control over VSNL after the government had put it on the block for divestment. Reliance Communications too had bid for the telco.

DoT has said that the shareholders agreement puts the responsibility of the company’s strategic partner – which in this case was a subsidiary of Tata Sons – to not only hive off or demerge the surplus land into a resulting company but also prohibit it from causing directly or indirectly any acts that might adversely effect or delay the hiving off or demerger of the land.

However it has been contended that the Tatas were not interested in hiving off the surplus land, as in an event of a status quo, the company could retail the entire land by paying only 25 per cent of the value to the Government. Tatas have denied the allegations.

DoT has been saying that the government should have transferred the surplus land before divesting the company as the differences between the Tatas and the government have lead to a huge delay in the sale of the surplus land.

Respnding to the setting up of the committee, a Tata Communications spokesperson said: “Tata Communications welcomes any government process that hopefully will expedite the demerger of Surplus Land, which we have repeatedly requested in the best interests of the company and its shareholders. We categorically deny that Tata Communications or the Tata Group has benefited or seeks to derive benefits from the surplus land.”