VSNL files suit seeking Rs 2,560 cr from govt

VSNL files suit seeking Rs 2,560 cr from govt

Saturday, January 29, 2005 (Mumbai):

Telecom company Videsh Sanchar Nigam Ltd has filed a lawsuit against the central government at Bombay High Court, seeking a compensation of Rs 2,560.72 crore for premature termination of its international long distance (ILD) monopoly.

In its petition filed on Thursday, the Tata group company said the government failed to keep its commitment that VSNL would be allowed to retain its monopoly in ILD telephony market till March 31, 2004.

The Department of Telecommunications, through a letter dated July 28, 2000, had terminated VSNL's monopoly in voice telephony by 2002, two years ahead of the promised date, the petition said.

The DoT had offered a compensation package to VSNL for early termination of monopoly and had admitted that premature termination of monopoly would cause severe prejudice and monetary loss to the Tata group company.

The department had also offered additional compensation in case loss in revenues was proven by an independent consultant, the petition said.

Credit Suisse First Boston (CSFB) and Salmon Smith Barney (SSB), who were the lead managers for VSNL's Global Depository Receipts in 1997 and 1999 respectively, had been entrusted with the job of assessing the losses in September 2000 by the government and VSNL. (PTI)

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