Stocks

HCL Infosystems tanks on CWG contract probe

Our Bureau New Delhi | Updated on June 09, 2011 Published on June 09, 2011




The shares of HCL Infosystems on Thursday dropped 5.65 per cent on the BSE — a day after CBI's lens fell on its broadcast network contract. After touching the day's low of Rs 92.5 a share, the HCL scrip recovered slightly to close at Rs 98.60 a share.

The investigating agency on Wednesday had carried out searches in the premises of former top officials of MTNL, and HCL Infosystems for allegedly inflating the cost of setting up broadcast network for the Commonwealth Games.

The CBI alleged that MTNL had awarded the contract to the private company at an “exorbitant price” of about Rs 570 crore by manipulating contract specifications.

In a statement, HCL pointed out that the CWG installation formed a part of a much larger mandate from MTNL. HCL said that it takes pride in having an “opportunity to be associated with the prestigious project involving the deployment of MPLS and IP-based backbone network for MTNL for Delhi and Mumbai.”

“The project also involved the special installation of the equipment for less than a month during the Commonwealth Games, for uninterrupted broadcasting of this world event, as a part of the immediate need of the customer. According to the project plan, immediately on completion of the event, the entire equipment has been redeployed in Delhi and Mumbai as per the larger mandate of the agreement,” it said.

Once completed, the deployment can enable MTNL to generate additional revenues with the marketing of the MPLS services for all its corporate, enterprise and Government customers in the two metros, HCL statement added.

HCL asserted that the project had detailed technical specifications and involved “extremely stringent performance criteria.” HCL further said that hefty penalties had been defined in the contract for any underperformance, and that the project involved “extensive scrutiny by the team of experts from government to ensure impeccable performance.”

Published on June 09, 2011
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