Sibal all set to open NDA's can of worms

Telecom minister Kapil Sibal has hit back at the NDA dispensation by ordering a full blown inquiry into the disinvestment of VSNL in 2002, which he said did not seem to be fair and transparent.

Sibal has written to the secretary of the department of telecommunications (DoT) R. Chandrasekhar to set up a high level committee under additional secretary, telecom, S.R. Rao to examine the VSNL-Tata divestment deal in detail and submit its recommendations latest by March 31, 2011 with a view to secure the interests of the government and the investors.

Headlines Today spoke with Chandrasekhar who confirmed that several aspects of the divestment, primarily the use of 773 acres of surplus land by VSNL, were now under examination. Sibal, using this opportunity to get back at his predecessor Arun Shourie who was then disinvestment minister, believes that the interests of shareholders and the government were adversely impacted by the absence of the demerger of 773.13 acres of surplus land of VSNL into a separate company.

He has written that it was the responsibility of strategic partner Panatone Finvest Ltd, a subsidiary of Tata Sons, under shareholding agreement Article 4.7 to not only hive off or demerge the surplus land into a resulting firm but more importantly, they were forbidden from causing directly or indirectly any acts, matters or deeds that might adversely delay the hiving off or demerger of the land in the resulting company.

Then Attorney General Milon Banerjee in his opinion dated May 21, 2005, has indicated that right from the beginning the strategic partner was not interested in hiving off/demerger of the surplus land. Moreover, Sibal has written that Banerjee in the event of a status quo where entire land is retained by paying only 25 per cent of the value of the same to the government, "In this regard, the strategic partner Panatone Finvest is in default of discharging its legal obligations as per shareholders agreement (SHA)."

He also goes on to say that the government in 2002 should have, preferably transferred the surplus land from the ownership of VSNL before divesting its share in the government-led telecom giant. "But for reasons which are yet to be explored, it appears that the said land was not separated before divestment of VSNL in February 2002.

As a result of the inordinate delay in hiving off/demerger, Panatone Finvest has been enjoying the precious government land without paying a single rupee for it."

Courtesy: Headlines Today