No money taken out of VSNL so far: Mahajan

In his inimitable style, Mahajan said ‘if the private sector behaves badly after disinvestment, they will get good government directors on the boards of their companies.’ He said that this was the only reason why government as the holder of a 26 per cent stake in the company had intervened and insisted that a committee with government directors on the board be formed to take a fresh look at the decision.

The committee, which comprises government nominee director on VSNL’s board Y. S. Bhave and three other members, is scheduled to submit its report by August 15, Mahajan informed the House.

Justifying the government’s retention of 26 per cent equity in VSNL against Tatas’ 45 per cent, he said ‘when the government took a conscious decision to retain 26 per cent stake in VSNL, it was because we thought we had a role in it. Our role cannot be diminished.’

However, he said the government had no intention of interfering in day-to-day business of VSNL and would like to work through directors appointed to the boards of divested companies. He said that the government’s objection to Tatas’ decision was on the grounds of timing, lack of valuation of TTL shares and the fact that the government director had been overruled.

Mahajan denied that VSNL had been divested while it had surplus money, saying the Rs 1,500 crore reserves of VSNL were accounted for—Rs 800 crore was needed for its ADR/GDR issue, another Rs 200 crore was to be paid to MTNL while another Rs 300 crore was needed for its basic service license.

When Opposition questioned Mahajan what according to him was the valuation of TTL, he said ‘I am not an expert in the matter that is why I am a minister.’