New Delhi, March 22 (Agencies): Telecom deals continue to haunt governments, past and present. The 2G spectrum scam, which led DMK leader and former Telecom Minister A Raja to jail, has embarrassed the government. Mr Raja gave spectrum at throwaway prices to companies in 2008; last week, the CBI, which is investigating the scam, said that he had forged documents to allow him to bend the rules that were meant to govern the allocation of spectrum.
Now, another deal, dating back to 2002, when the BJP-led NDA was in power, is generating some heat. Arun Shourie, as Disinvestment Minister, signed off on a deal that gave the Tata Group controlling stake in the government-owned VSNL (now Tata Telecommunications). VSNL provided long distance communications like telephony and internet services. Panatone Finvest Ltd paid Rs. 1,439 crore for 25 per cent stake in VSNL. As part of the deal, 773 acres of land that was not a part of the core operations of the company, defined as “surplus land,” was to be demerged and transferred to a new entity with the government as a majority shareholder.
The Tatas paid Rs. 202 per share. Telecom Minister Kapil Sibal alleges that this evaluation did not take into account the 773 acres of surplus land. Mr Sibal has ordered an inquiry into the deal, and a report is expected by March 31. Mr Shourie told NDTV today that the deal he allowed for the sale of VSNL included stringent conditions that prohibited the sale of surplus land by whichever company won the bid to buy controlling stake in the company. “There are such stringent clauses that the person who wins the bid on VSNL, we have provided, shall not have any right on the land at all,” he said.
He added that the land cannot be sold or transferred without a special resolution. “Shareholders agreements and those clauses are right here. It prohibits the winning bidder, in this case the Tatas, to do anything with the land,” he said. The Tatas say they last heard from the government on this aspect in 2006. Tata Communications in a statement said, “We welcome 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.
“We categorically deny that Tata Communications or the Tata Group has benefited or seeks to derive benefit from the surplus land,” it added. Questioning the role of the UPA government, Shourie said, “The Tatas said they have been writing to the government and the government has not been able to make up its mind that is for this government to answer. What has it been doing for six years?”
Now, another deal, dating back to 2002, when the BJP-led NDA was in power, is generating some heat. Arun Shourie, as Disinvestment Minister, signed off on a deal that gave the Tata Group controlling stake in the government-owned VSNL (now Tata Telecommunications). VSNL provided long distance communications like telephony and internet services. Panatone Finvest Ltd paid Rs. 1,439 crore for 25 per cent stake in VSNL. As part of the deal, 773 acres of land that was not a part of the core operations of the company, defined as “surplus land,” was to be demerged and transferred to a new entity with the government as a majority shareholder.
The Tatas paid Rs. 202 per share. Telecom Minister Kapil Sibal alleges that this evaluation did not take into account the 773 acres of surplus land. Mr Sibal has ordered an inquiry into the deal, and a report is expected by March 31. Mr Shourie told NDTV today that the deal he allowed for the sale of VSNL included stringent conditions that prohibited the sale of surplus land by whichever company won the bid to buy controlling stake in the company. “There are such stringent clauses that the person who wins the bid on VSNL, we have provided, shall not have any right on the land at all,” he said.
He added that the land cannot be sold or transferred without a special resolution. “Shareholders agreements and those clauses are right here. It prohibits the winning bidder, in this case the Tatas, to do anything with the land,” he said. The Tatas say they last heard from the government on this aspect in 2006. Tata Communications in a statement said, “We welcome 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.
“We categorically deny that Tata Communications or the Tata Group has benefited or seeks to derive benefit from the surplus land,” it added. Questioning the role of the UPA government, Shourie said, “The Tatas said they have been writing to the government and the government has not been able to make up its mind that is for this government to answer. What has it been doing for six years?”
