June 29, 2002 | 1245 IST
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Money > Reuters > Report June 29, 2002 | 1245 IST |
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VSNL hopes to resolve WorldCom issueIndia's international phone service monopoly Videsh Sanchar Nigam Ltd said concerns that it may not be able to recover dues from troubled US telecom giant WorldCom Inc were unwarranted. "Our belief and understanding at this point in time is that the issue would get resolved satisfactorily," N Srinath, VSNL's director of operations said in a statement made available to Reuters on Saturday. "Concerns that VSNL may not be able to recover large sums of money from WorldCom seems unwarranted at this point in time." Analysts say the New York-listed VSNL, stands to lose Rs 3.5 billion to Rs 3.7 billion if WorldCom Inc files for bankruptcy following a major accounting scandal. The statement said VSNL officials were in touch with WorldCom officials and hoped discussions with the US telecom firm would continue to be positive and mutually beneficial. On Friday, The Economic Times daily quoted unnamed sources at VSNL as saying WorldCom could owe the Indian firm Rs 5 billion in call completion charges for phone calls made between the United States and India between April and June. VSNL's shares plunged 7.4 per cent, or Rs 11.8, to close at Rs 147.40 on the Bombay Stock Exchange on Friday. US regulators have charged WorldCom, the second-largest US long-distance phone carrier, with fraud after it admitted this week that it had booked $3.8 billion in expenses improperly as capital investment. The Business Standard newspaper on Saturday quoted an unnamed government official as saying the Indian government might inquire into the deal between VSNL and WorldCom. "We may induct an investigation into the deal between VSNL and WorldCom to examine whether the agreement between the two sides conformed to international practices," the newspaper quoted the official as saying. VSNL was recently privatised by the government and the telecom major is now owned by India's second-largest business group, the Tatas. "After all, VSNL, was under government control when the deal was signed and therefore it would be our responsibility to ensure that there were no irregularities," the Business Standard quoted the official saying. VSNL receives 88 per cent of its operating revenue from international phone services and faces no competition even after the government ended its monopoly on international telephone traffic in April. ALSO READ:
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