Tatas say no benefit from demerger of VSNL land

MUMBAI: The row over demerger of 773.13 acres of surplus land with telecom service provider VSNL continues as the company on Thursday said it is a mere custodian of the plot and has no authority to take any decision pertaining to it.

The ownership of the land rests with original shareholders and the final decision on the land issue would be taken by the government, the company said.

"Tata group's holding does not qualify for any benefit from demerger of the land. VSNL is only a custodian and is not going to get any portion of the land," VSNL Chairman Subodh Bhargava told shareholders at the company's 21st annual general meeting here today.

The VSNL board has no role to play in the demerger of the said land, Bhargava said, adding: "The government is considering various options. We do not have any authority to take a decision. As and when the government decides to demerge the land, we will execute it."

He also clarified that government nominee directors on the company's Board were to facilitate VSNL's business enhancement and not to protect the governement's interests.

In February 2002, the government sold a 25 per cent stake in VSNL to the Tatas for Rs 1,439 crore. The understanding at that time was that the surplus land would not form part of the deal and it would be spun off into a separate company.

The surplus land is located in Delhi, Chennai, Kolkata and Pune.