Ratan Tata steps down as VSNL chairman

Subodh Bhargava, former Eicher Group chairman, has been appointed the new chairman.

Ratan Tata today stepped down as chairman of the NYSE-listed Videsh Sanchar Nigam Limited (VSNL). Subodh Bhargava, former Eicher Group chairman, has been appointed the new chairman.

Tata will, however, be involved with the co-ordination and integration of the Tata group's strategies and activities in the telecom business.

"The Tata group's expanding activities in India and overseas, and his additional responsibilities in connection with the Investment Commission" have been cited as reasons for Ratan Tata's decision to step down as VSNL's chairman.

A Tata group's statement pointed out that Tata expressed the view that Bhargava would provide continuity to the governance of the company. The decision was taken at VSNL's board meeting in Mumbai today.

Kishore Chaukar, managing director, Tata Industries, said, "Tata has already completed his three-year term as the chairman. Besides, his responsibilities have increased both within the group as well as internationally. So instead of being tied down to one single company, it is better to lead the group's telecom business . We have a whole lot of young talented people within the age bracket of 35-40 years."

Chaukar pointed out that the group had already committed to invest Rs 30,000 crore.

"We have already spent over Rs 15,000 crore and plan to invest over Rs 10,000 crore over the next couple of years to enhance the group's geographic coverage and capacity expansion". "This will be mainly done through Tata Teleservices", he added.

Sources close to VSNL said, "by being not close to any one telecom company, Ratan Tata will now be able to take a holistic view and help shape the group's telecom business. In fact there are several decisions pending as to who will be the CEO of Tata Teleservices and there is only acting managing director for VSNL."

Chaukar, however, claimed that "the board will decide on the CEO of TTSL. We, however, have a senior management team already in place to take appropriate decisions in TTSL".

Bhargava started his association with the VSNL board as a government-nominated independent director on December 15, 1998, prior to the disinvestment of the company.

As the new chairman of VSNL, he will now have to relinquish his position as chairman of VSNL's audit committee. Bhargava has been a past president of the Confederation of Indian Industry. He is presently associated with several boards as independent director, and is currently chairman of Wartsila India.

Interestingly, the VSNL board has deferred the demerger of the surplus land with the company.

The board meeting was scheduled to discuss the draft scheme which was put up by Panatone Finvest, the special purpose vehicle through which the Tata group had invested in VSNL.