Saturday, January 29 2005 15:25 Hrs (IST) - World Time -

Mumbai: Internet gateway and service provider Videsh Sanchar Nigam Ltd (VSNL) has filed a suit against the Government of India (GoI) with the Bombay High Court seeking a compensation of Rs 2,560.72 crore for premature termination of its International Long Distance (ILD) monopoly.

In its petition filed with the High Court on Thursday (Jan 27, 2005), the Tata Group company said the Government failed to keep its commitment that VSNL would be allowed to retain its monopoly in ILD telephony market till March 31, 2004.

The Department of Telecommunications (DoT) through a letter dated July 28, 2000, had terminated VSNL's monopoly in voice telephony by 2002, two years ahead of the promised date, the petition said.

DoT on behalf of GoI had offered a compensation package to VSNL for early termination of monopoly and had admitted that premature termination of monopoly would cause severe prejudice and monetary loss to the Tata Group Company.

The department had also offered additional compensation in case loss in revenues was proven by an independent consultant, the petition said.

In September 2000, Credit Suisse First Boston (CSFB) and Salmon Smith Barney (SSB), who were the lead managers for VSNL's Global Depository Receipts (GDRs) in 1997 and 1999 respectively, were entrusted mutually (by GOI and VSNL) to assess the losses.