The Hindu Business Line : Sidharth Ray co exits Data Access

THE Sidharth Ray-promoted SPA Enterprises has exited the international long distance (ILD) company Data Access after passing on the management of the company to a consortium of investors.

Mr Ray had held a 76 per cent stake in the telecom company but he ran into rough weather after the State-owned Bharat Sanchar Nigam Ltd (BSNL) pulled the plug off the ILD company for non-payment of dues.

Chennai-based businessman Mr K.C. Palanisami, who leads the consortium of investors, has taken over as the new Chairman and Managing Director of Data Access.

The majority share holding of the company was passed on to the investors from July 1, 2004, onwards, following which Mr Ray held the position of Managing Director in the company for a month However, company sources said Mr Ray exited from the company board after falling out with the new management.

In a letter written to his friends, Mr Ray said: "The management style of the new management is falling far short of corporate governance requirement for a public company. Due to their inability to infuse funds into the company on time, I resigned from the board of directors, effective August 30, 2004." The resignation was registered with the Department of Company Affairs on October 29.

Mr Ray formally exited Data Access and all its subsidiaries from November 1. The management control and all financial decision-making are now vested with the investor group led by Mr Palanisami.

When contacted, Mr Ray refused to comment on the developments.

Data Access has been in a rough patch over the last few months ever since its plans to go for a Rs 100-crore initial public offering was scuttled after the Securities Exchange Board of India (SEBI) raised objections to its proposal to get listed on the bourses.

The company owes nearly Rs 150 crore to BSNL as interconnection charges for routing incoming ILD calls. Due to non-payment of the dues, BSNL has stopped giving interconnection to Data Access, which has had a major impact on the latter's business.

The company, at one time, claimed to have cornered 30 per cent of the incoming ILD market and had posed a major challenge to incumbent Videsh Sanchar Nigam Ltd (VSNL) by offering better settlement rates to BSNL.

In November 2003, Hong Kong-based Pacific Century Cyber Works (PCCW) had brought down its stake in Data Access from 74 per cent to 24 per cent. After the equity restructuring, Sidharth Ray's SPA Enterprises held 76 per cent, up from 26 per cent held earlier.

More Stories on : People | Telecommunications

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page