National

VSNL disinvestment totally transparent, says Shourie

By Our Special Correspondent

NEW DELHI JUNE 4. The controversy surrounding the spat between the Communications Minister, Pramod Mahajan, and the Tata Group over the investment decision of the recently-privatised VSNL assumed a new dimension today with the Disinvestment Minister, Arun Shourie, defending the disinvestment process and warning of corporate warfare which could jeopardise future disinvestment exercises.

Mr. Shourie's official entry into the controversy comes a day after the BJP, through an official statement, described the VSNL disinvestment case as the "most disappointing'' and said it had sent "a wrong signal" by which people might start looking at the disinvestment process as an opportunity to siphon off funds from public sector units.

Mr. Shourie was discreet in his press conference not to question the stand taken by the Communications Minister to oppose the Tata-managed VSNL's decision to pull out Rs. 1,200 crores from its cash reserves for investing in another Group company, Tata Teleservices. But he was more than forthcoming in saying that the shareholders' agreement in the case of the VSNL disinvestment exercise was "tight enough'' not to warrant any renewal. He justified the position that the investment decisions by the new VSNL management were governed by the relevant provisions of the Companies Act that left it to the board of management to take such decisions.

"As far as the disinvestment process is concerned, we are satisfied and through the controversy, we have been fortified,'' he observed, adding that as far as his Ministry was concerned, "once disinvestment is over, we are out of the picture.''

Though Mr. Shourie did not directly comment on the Tata-VSNL decision to invest in Tata Teleservices to pick up other telecom business, he nonetheless quoted from an official communication from the VSNL chairman to the Government before the company was privatised saying that the Government-owned VSNL had been denied permission to diversify its activities into other telecom business using its reserve funds. Consequently, the VSNL was left without any subscriber base in the telecom business once its monopoly ended, while rival business organisations had cornered a large number of corporate subscribers in India.

Mr. Shourie also countered some of the news reports that appeared today, based on a statement by BJP party functionaries and informal comments by some BJP leaders. He maintained that VSNL disinvestment was totally transparent; that no deal had been struck and that no one, especially the Telecom Ministry, was kept out of it. He produced evidence to show the number of meetings in which Communications Ministry officials were present and also refuted reports that certain VSNL assets had been delinked before disinvestment at the insistence of the BJP national executive committee meeting in Goa in April this year by pointing out that the entire disinvestment process and transfer of management in case of the VSNL had been accomplished by February 13 this year.

Mr. Shourie maintained that raising of such controversies in the post-disinvestment period would affect "investor sentiment'' since the perception had gone around that in India endless controversies surrounded Government decisions or that there would be some `tripping up' at a later stage in the Government decisions. "So potential investors have this feeling that why get into the `mess' in India; it is better to invest elsewhere,'' Mr. Shourie said. "Beware of corporate warfare,'' he advised the mediapersons but laughed away a suggestion that corporate warfare had entered the BJP too. The Minister said he addressed the press after receiving clearances from the Union Home Minister, L. K. Advani, and the BJP President, Jana Krishnamurthy.

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