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|April 23, 1998||
Able but not willing
VSNL chieftains want the government to hold back divestment till commitments to shareholders are met and an expansion blueprint is finalised.V idesh Sanchar Nigam Ltd top brass are finding themselves in some hot water. For, the government is whittling away at their clout and the income-tax department, at their profits.
Last Saturday, the Union cabinet had taken up the issue of divestment of
At a meeting called by cabinet secretary Prabhat Kumar, VSNL officials had claimed that there would be no takers for a fresh global depositary receipt issue since commitments made during the last issue were still to be met.
The government had promised to set up a sub-continental hub in India with terrestrial links to route data traffic from the region. Though proposals had been called for, no decision has been taken. How would investors react to a new GDR issue when the promises made during the last GDR issue had not been kept, the VSNL officials asked.
The government had planned to offload one million VSNL shares in the domestic market since company officials had insisted that the government should float equity in the Indian market before targeting the international ones.
VSNL is also facing flak from another quarter -- the income tax department. The department insists VSNL has to pay them tax on the licence fee it pays the Department of Telecommunications since the licence fee is part of the fee VSNL shares with DoT. The I-T department, therefore, is claiming that VSNL is avoiding payment by claiming as expenditure what it actually comes back to itself. Trouble is, the amount works up to Rs eight billion, starting from 1992-93. Besides, there is the matter of about Rs 1.4 billion still to be paid annually as tax if the current licence fee exists.
Another issue still hanging fire is that of allotment of shares to VSNL employees, who threaten to go on strike if they aren't given 200 shares each at the average price realised during the first divestment of shares in 1992.
-Compiled from the Indian media
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