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November 11, 1997


VSNL employees strike work

The entire workforce of the public-sector telecom giant, the Videsh Sanchar Nigam Limited, went on a day's casual leave today to protest against, what the Joint Action Committee of the VSNL staff describe as, "the inordinate delay on the part of union government to allot 200 shares to each employee at a discounted price".

The employees have threatened to strike work on November 19 if the problems concerning the proposed employees stock option scheme are not sorted out by then.

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Meanwhile, it is learnt that the Department of Telecommunications is to shortly move a cabinet note supporting the demand of the employees.

The employees have already written to the prime minister, the labour minister and the communications ministry.

They are demanding that the stocks be issued to them at the price notified during the second VSNL divestment in 1992. The rate then was Rs 210.

According to the Securities and Exchange Board of India guidelines on stock options, the stocks can be issued to the employees at 15 per cent discount to the listed price. The employees want the shares at Rs 178.50. The second divestment never took place as the government decided to go in for a GDR offering which was also withdrawn.

But subsequently, VSNL went in for a GDR at Rs 1,000. The domestic divestment is slated at Rs 900, at a 10 per cent discount to the GDR offering. At a further discount of 15 per cent to the domestic price, the employees can pick up the stock at Rs 765 per share.

The employees say that they have been telling the DoT that the government should uphold the commitment given to the employees that the stock option would be priced in relation to the 1992 VSNL stock prices.

The finance ministry has already turned down this proposal but the employees say it is the duty of the administrative ministry to wrangle the deal for its employees. It is learnt that DoT has decided to support the cause of the employees.

The employees are also citing the example of the HPCL divestment where employees were issued 200 shares at the prevailing market rates but were subsequently issued 400 bonus shares, thereby bringing down the average market price.

The Joint Action Committee's press note has said that the sole purpose of the agitation is "to arouse the conscience of the government".

The VSNL, in another press release, has urged the employees to call off the agitation and claimed that it has taken up the allotment issue with the union government.

The company further stated that the government and the VSNL management have assured the employees that the issue will be amicably resolved by the end of December.

Expressing its inability to honour the commitment for the time being, the company has claimed that a definite time-frame may not be feasible due to the involvement of many government agencies.


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