Comments
The delay in demerging surplus land owned by Videsh Sanchar Nigam Ltd was in violation of the shareholders agreement signed between the Government and the Tatas, according to the Communication and IT Minister, Mr Kapil Sibal.
The Minister, in a letter to the Department of Telecom, has stated that the Attorney General of India and the Comptroller and Auditor General had expressed in 2005 and 2006 respectively concern on the issue.
“CAG in its report 17 of 2006 has noted that the delay in finalising the arrangement had the potential of conferring unquantifiable benefit from the sale of surplus land on Strategic Partner (Tatas) in proportion to its shareholding acquired from secondary market on the date of demerger. Attorney General of India, Mr Milon K Banerji in his opinion dated May 21, 2005, has indicated that right from the beginning the strategic partner was not interested in demerging surplus land as in the event of status quo retains the entire land by paying only 25 per cent of the value of the same to the Government,” Mr Sibal said in the letter to DoT, ordering a probe into the entire sale of VSNL stake to the Tatas.
DoT has been told to submit a report by March 31.
Tata Communications denied that they had benefited from the surplus land. “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,” said a statement from the company.
The issue relates to 773 acres owned by VSNL which was not part of the sale agreement signed with the Tatas in 2002 by the NDA Government. While the land, spread across five cities, was supposed to have been demerged after the sale, so far it has not happened.
The delay has been on account of disagreement between the Government and the Tatas on who will foot the expense for the demerger. The Tatas wanted the Government to take on the burden as they did not have any stake in the land.
Mr Arun Shourie, the Disinvestment Minister in 2002 under whom the stake sale took place, said: “This probe will boomerang on Kapil Sibal and the Congress.”
Mr Shourie pointed out that while he, and the BJP-led government, had done their duty by inserting the safeguard clauses, it was the Congress-led UPA government that failed to put the safeguards into action.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.