Tatas return fire in spat with Birlas

The Tatas have urged DoT to reject "frivolous and baseless" charges made by the Birlas.

Taking on the Aditya Birla group, the Tatas have said the group has breached a "shareholders' agreement" between the two and violated a "waiver clause" with regard to Idea Cellular.

In a letter to Department of Telecommunications Secretary JS Sarma, Tata Sons Director Kishore Chaukar said, "The Tata group reserves its right to take appropriate legal action" because of the breach of the waiver agreement.

"By raising issues which were settled when we signed the waiver agreement, the Birlas gave up all claims with regard to Tata Teleservices' unified access licences," the letter said.

The Tatas also said Birla Nuvo Ltd was simply raising shareholders' grievances and seeking their relief on a forum (DoT) that was not meant to decide these issues. The letter further urged the DoT to reject "frivolous and baseless allegations made by the Birlas".

According to the Tatas, the Aditya Birla group, acting through Grasim Industries, had executed a waiver agreement on December 11, 2004 with Tata Industries.

"The very issues raised by the Birlas regarding compliance were raised previously, but were settled under the waiver agreement. The claims in relation to Tata Teleservices and Tata Teleservices (Maharashtra) Ltd were specifically given up by the Birlas," Tata sources told Business Standard.

When contacted, Sanjeev Aga, managing director of Birla Nuvo Ltd and director of Idea Cellular, said the Aditya Birla group had not yet got a copy of Chaukar's letter and he would, therefore, not be able to comment on the matter.

The Tatas have also contended that Tata Industries Ltd, which holds 31.69 per cent in Idea Cellular, has less than 10 per cent equity in Tata Teleservices (around 4.51% currently) and, therefore, does not violate the regulatory norms at all.

According to the norms, a company must not be subjected to competition from its own promoters and equity holders that have over 10 per cent stake in another company in the same telecom circle.

The Tatas also said repeated references to the "Tata group" are an attempt to "mislead", as Tata Industries was not a promoter of either Tata Cellular Ltd, Tata Telservices Ltd or Tata Tele Maharashtra.

The communication from the Tatas follows a letter from the Aditya Birla group to the DoT on February 22, demanding that the government intervene and ask the Tatas to immediately reduce their shareholding in Idea Cellular.

The Aditya Birla group has contended that the Tatas have breached licence conditions regarding Idea Cellular in as many as seven telecom circles.

The Tatas had applied to migrate from a basic licence to a universal access licence in November 2003. They also applied for fresh licences in 11 new circles which included Punjab, Haryana, Uttar Pradesh (east), Kolkata and West Bengal.