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|June 16, 1997||
Elnet to end ties with VSNL for providing e-mail serviceElnet Technologies Limited, which manages the Elnet Software City, has decided to terminate its agreement with Videsh Sanchar Nigam limited to market VSNL's GEMS 400 E-mail services.
This follows the decision of the company's board to close down its e-mail service which was marketed under the brand name 'Connect! Mail'.
A formal letter has been sent to the VSNL chairman regarding the same. VSNL is likely to encash bank guarantees of Elnet to the tune of Rs 4-5 million, it is learnt.
The agreement between the companies was signed about two years ago and the contract was to be renegotiated last year as Elnet was finding it difficult to fulfil conditions relating to traffic volume.
However, the renegotiations were on when charges were made against one of the company's promoters, Thiagaraj S Chettiar, based on which, the State Crime Branch, CID, registered a case against him.
In fact, both Elnet Limited and Elnet Technologies Limited were jointly promoted with ELCOT. A committee appointed by ELCOT has taken over the management of both companies.
The board of Elnet Technologies has decided to terminate the e-mail business, keeping in mind the fact that the business was not performing to projections. Since another Rs 4-5 million would be required to revive the business, it was decided that the company should cut its losses and focus only on providing infrastructure for software development.
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