May 31, 2002 | 1950 IST
|
|
|
|
|
|
||
|
Home >
Money > PTI > Report May 31, 2002 | 1950 IST |
Feedback
|
|
|
Mahajan threatens action against Tatas over VSNLThe government and the Tatas on Friday confronted each other over the Rs 12-billion investment decision by the recently privatised Videsh Sanchar Nigam Ltd with Communication Minister Pramod Mahajan threatening to take legal action if the decision was not reversed. The Tatas, however, said that the decision was in conformity with Company Law. "Whatever is legally possible and permissible will be done," Mahajan said, while questioning the business ethics of the Tatas in diverting Rs 12 billion from recently acquired VSNL to another group company that was yet to take off and whose future was not known. "If this was a fair decision, why did VSNL not appoint a government nominee in the sub-committee which has been constituted to finalise details of the investment, Mahajan asked. "This looks like a political battle," he said. Defending the VSNL decision to invest Rs 12 billion in Tata Teleservices, Tatas said in a statement that it "was in consonance with all the provisions of shareholders' agreement and in compliance with all aspects of Company Law." Replying to Mahajan's charge that the government nominee Rakesh Kumar was not taken into the VSNL board's sub-committee, the Tatas said: "The proposal envisaged the investment to be made over a 48-month period under the supervision of a board committee which the government director had in fact been invited to join." Asked if the government would block the decision by VSNL, Mahajan said: "If legally permissible, I shall block whatever is wrong." Mahajan accused the Tata group of using the overseas phone carrier's cash to boost a weak affiliate. "In my opinion, VSNL's investment of Rs 12 billion in Tata Teleservices is wrong," he said. "In the garb of strengthening VSNL, the Tatas are strengthening Tata Teleservices," Mahajan said. VSNL, listed on the New York Stock Exchange, had announced late on Tuesday that it would invest the cash in the equity of Tata Teleservices, an unlisted fixed-line phone service provider in Andhra Pradesh. The Tata group bought a 25 per cent stake in VSNL in February, and has made an offer to minority shareholders for a further 20 per cent, as required by Indian takeover rules. The government remains a key shareholder with a 26 percent stake. Additional inputs: Reuters ALSO READ:
|
ADVERTISEMENT |
||||||||||||||
