Tatas write to Sibal on VSNL deal

Reiterating the company has not gained anything from the surplus Videsh Sanchar Nigam Limited (VSNL) land, Tata Communications today said since 2005, the company had, several times, tried to demerge surplus land, but received no response from the telecom ministry.

In a letter to communications and IT minister Kapil Sibal, Tata Communications Chairman Subodh Bhargava said the surplus land remained unsecured and unused by the company and it was waiting for a resolution of the demerger issue. The company continued to bear the associated taxes, as well as the expenses towards the maintenance and security of the surplus land.

VSNL, now known as Tata Communications Ltd, was acquired by a subsidiary of Tata Sons, the holding company of the Tata group, in 2002, when it was privatised by the NDA government. “The demerger of this surplus land is waiting for the government's response on the matter. You should also recognise that the board of Tata Communications has two directors nominated by the government and they are apprised of all these issues,” Bhargava said in the letter. Tata Communications has been unable to raise any non-debt funding in the last few years to support its investments and growth aspirations due to non-resolution of the issue, the letter said.

Bhargava's letter followed concerns raised by Sibal over the disinvestment of VSNL in 2002. “It has come to my notice that the disinvestment of Videsh Sanchar Nigam Limited in 2002 does not seem to be fair and transparent. Prima facie, the way the issue of demerger of VSNL's 773.13 acres of surplus land was handled in 2002 and thereafter, not only the interests of investors but also the interests of the government seems to have been adversely affected,” Sibal had said. He had also asked Telecom Secretary R Chandrashekhar to constitute a high-level committee to examine the issue in detail.

Bhargava said the company had participated in a few discussions and received correspondence on the surplus land, but this dealt with seeking clarifications and the department of telecommunication’s response to the draft scheme of the demerger was awaited. The letter said the company sought a speedy resolution to the demerger issue in the best interests of the company and all its shareholders.