Tatas ask govt not to hold up STD licence over expat CEO

NEW DELHI: The Tatas have criticised the government for putting its national long distance licence on hold on account of its CEO Darryl Green being a foreigner. In a communication to the government, Tata Teleservices has argued that the clause that requires the CEO of the company to be an Indian resident could not be selectively applied as many clauses in the new telecom FDI guidelines were currently under review and stood deferred until October 2, ’06.

Under these circumstances, compliance with this clause must also be kept in abeyance till October 2, Tata Teleservices said, while adding: “We hereby undertake to comply with the FDI guidelines as may be finally determined. We therefore request that our application be processed at the earliest.”

Explaining their position, the company said: “In July ’05, well before Press Note 5 was issued, our company had recruited Mr Green, a US national as CEO. The question mark over this clause has created difficulties for companies such as ours.

The continuing uncertainty regarding the applicability of the clause on foreign CEOs is unfortunately creating a human impact, which we trust you will appreciate is detrimental to the operations of the company.”

“The lack of clarity on the applicability of the guidelines to companies such as ours has also seemingly thrown a cloud over when we will be able to sign the NLD licence and the Universal Service Licences for the three circles of J&K, Assam and the North East, which we have applied for.

Our applications are pending with the department of telecom,” the company added. Besides, Tata Teleservices has also pointed out that the new guidelines should only be applied to companies whose FDI holding was above 49%. Their logic is that the genesis of the new guidelines lay in the request of companies who wanted to increase their foreign holdings beyond 49%.

The company has also drawn the government’s attention to the fact that while players with below 49% FDI are uncertain about the applicability of the new guidelines, majority foreign-owned ones were not yet obliged to comply due to the deferral of the compliance date. This, it said, did not serve the interest of the industry, not meaningfully addresses the concerns raised by the security agencies.