US agency okays VSNL's Tyco buyout

The Tatas-controlled Videsh Sanchar Nigam (VSNL) today got clearance from a us government agency for acquisition of undersea cable assets of Tyco Global Network (TGN) for $130 million.

The approval by the Committee on Foreign Investment in the United States (CFIUS) will give VSNL control over 60,000 km of undersea communications cable spanning three continents.

"CFIUS, the regulatory body tasked with investigating potential national security concerns, issued a formal notice to VSNL that its review of the situation uncovered no significant issues of national security with regard to this transaction," a VSNL spokesperson said. VSNL had on November 1, 2004 signed an agreement with Tyco to acquire the undersea cable assets of TGN.

Earlier, AP had reported that the US justice department, FBI, homeland security department and defence department signed a 32-page agreement with the company to guarantee the US government can continue to install court-authorised wiretaps on the network and conduct background checks on VSNL employees in the US.

The agreement also requires that VSNL take steps to prevent illegal eavesdropping on US customers and guarantee that foreign governments can't access classified or sensitive US government information carried over the undersea network.

The agreement acknowledges that the US government would suffer "irreparable injury" if VSNL failed to comply with its promises.