Private telecom companies accuse BSNL of ‘coercive’ tactics

We are paying BSNL as per regulation (15 paisa per minute) but they are asking for more which is illegal," a senior official of a leading private telecom company said. However, BSNL is unfairly trying to charge a higher amount of 65 paisa per minute for such calls from all private operators, private operators alleged

New Delhi: Private telecom operators today slammed Bharat Sanchar Nigam (BSNL) for charging higher interconnection fee in violation of Telecom Regulatory Authority of India (TRAI) and Telecom Dispute Settlement and Appellate Tribunal (TDSAT) regulations and accused the state- run company's threats of disconnection of services in Rajasthan as "illegal and coercive".

BSNL's Rajasthan Telecom Circle has threatened to take action against leading private telecom operators for their failure to pay an amount of Rs37.65 crore as carriage fee.

"We wish to inform all the consumers/CAGs of Rajasthan regarding the illegal and coercive activity of BSNL to attempt to disconnect interconnectivity between its network (both landline and mobile) and private mobile operators' network," private operators, represented by their respective lobbies, COAI and AUSPI, said in a joint statement.

If BSNL carries out its threat, subscribers of private players will not be able to make calls to the PSU's fixed line telephone users and vice versa, impacting over 45 million telecom subscribers in Rajasthan.

Terming the claims as 'illegal', the associations said the move is in "clear violation of the TRAI regulations of March 2009 as well as the TDSAT orders" and would impact the subscribers in the state.

"The disconnection threats by BSNL, if carried out, would result in extreme hardship to consumers in various circles of all networks including that of BSNL," they said.

The associations said TRAI's Interconnect Usage Charges (Regulation 2009) mandates a private operator to pay 15 paisa per minute as carriage charges for a call to the BSNL's fixed line network within the state/circle.

"The action of BSNL goes against prevalent TRAI regulation. There is no stay on TRAI regulation. TDSAT has asked for review of the regulation which is part of ongoing consultation process of TRAI. We are paying BSNL as per regulation but they are asking for more which is illegal," a senior official of a leading private telecom company said.

However, BSNL is unfairly trying to charge a higher amount of 65 paisa per minute for such calls from all the private operators, they alleged.

"BSNL has wrongly reported the entire issue and no amount is outstanding on this account to BSNL...On behalf of the industry, we appeal to CMD, BSNL to withdraw these illegal demands," the statement said.


Cairn board to meet on royalty, cess payment in Rajasthan oilfield

After Cairn India's board agrees to make royalty cost-recoverable and pay cess on oil produced from the Rajasthan fields, it will write to its partner, state-owned Oil and Natural Gas Corporation (ONGC), for consent for the Vedanta transaction

New Delhi: The Cairn India board of directors may tomorrow concede to pay royalty and cess on its mainstay Rajasthan oilfields after parent firm Cairn Energy did a u-turn and accepted riders imposed by the government to clear its over $6 billion stake sale to Vedanta Resources, reports PTI.

The board of Cairn India, which had in February opposed changes in the Rajasthan contract making it liable to pay royalty and a Rs2,500 per tonne cess, will meet on Wednesday, following which the results of a shareholder vote called by Cairn Energy on the twin riders will be out, sources privy to the development said.

Cairn Energy, which owns a 52.11% stake in Cairn India, has voted to accept the two government conditions.

Vedanta, which has already bought a 10% stake in the company from Cairn Energy and another 18.5% from Petronas of Malaysia and other minority shareholders, has also voted for acceptance of the conditions.

Sources said Cairn Energy chairman Bill Gammell arrived here today to chair the Cairn India board meeting. Mr Gammell had last month skipped a Cairn India shareholders' meet, apparently to escape uncomfortable questions on the change of position.

After Cairn India's board agrees to make royalty cost-recoverable and pay cess on oil produced from the Rajasthan fields, it will write to its partner, state-owned Oil and Natural Gas Corporation (ONGC), for consent for the Vedanta transaction.

The ONGC board may consider waiving its pre-emption or right of first refusal (ROFR) and give Cairn a no-objection certificate to conclude the deal at its board meeting on 27th September.

Cairn Energy, which is selling a 40% stake in its Indian unit to Vedanta, had previously said it would rather call off the deal than force Cairn India to accept the government's conditions.

Minority shareholders at Cairn India's AGM in Mumbai last month had booed Cairn Energy for changing tack on the issue of royalty and cess to get $6.02 billion from the stake sale to Vedanta.

Cairn India had on 26th July stated that its April-June quarter net profit would halve to Rs1,435 crore if it was asked to share royalty on the Rajasthan crude oil.

The company currently does not pay any royalty on its 70% interest in the Rajasthan fields. Royalty, as per the contract, is paid by state-owned ONGC, which got a 30% stake in the 6.5 billion barrel field for free.

The Cabinet Committee on Economic Affairs (CCEA) on 27th June gave consent to the Cairn-Vedanta deal, subject to Cairn or its successor agreeing to charge or deduct the royalty paid by ONGC from revenues earned from the sale of oil before the profits are split between partners.

Also, Cairn India must pay a Rs2,500 per tonne cess on its 70% share of oil production. Till recently, Cairn had maintained that cess, like royalty, is a liability of ONGC and had initiated arbitration against the government over being forced to pay cess.

Cairn Energy's request for the twin government conditions to be voted on by shareholders is being done through a postal ballot.

Sources said the results of the postal ballot will be announced tomorrow afternoon, after which Cairn India's board of directors will meet.

Cairn Energy is selling a 40% stake in Cairn India in two tranches. The first tranche of 10% was completed in July and the second of 30% will be done after final government approval for the deal.

Since the Cairn-Vedanta deal was announced in August last year, Cairn India has been opposed to making royalty payments recoverable from the sale of oil and the company being made liable to pay a Rs2,500 per tonne cess, as this was not in line with the Production Sharing Contract (PSC).

A change in the contract was neither in the interest of the company, nor its minority shareholders, it has maintained.

Last August, Vedanta proposed buying a 51%-60% stake in oil and gas explorer Cairn India for up to $9.6 billion in cash, but the deal has been delayed awaiting government and regulatory approvals.

A Group of Ministers (GoM) headed by finance minister Pranab Mukherjee had recommended to Cabinet that the deal should be approved if Cairn or its successor agreed to royalty being added to the project cost and recovered from oil sales, as well as agreeing to pay its share of oil cess.

Days before the CCEA accepted the GoM recommendation and gave conditional approval, Cairn Energy lowered the price it was demanding from Vedanta to make up for the reduced profitability due to acceptance of the preconditions.

It also removed a non-compete provision from the deal and the related non-compete fee of Rs50 per share.

Vedanta's total payment for a 40% stake in Cairn India, at the reduced price of Rs355 per share, will now be $6.02 billion, instead of the earlier announced $6.84 billion.


Lohitha Lifesciences: Former top bureaucrat threatens legal action on environment violations

Former power and finance secretary EAS Sarma says no action taken by Centre or Andhra Pradesh government on fraudulent report

Former union power and finance secretary EAS Sarma has threatened to go to court against the central and the Andhra Pradesh governments as well as Lohitha Lifesciences company for alleged multiple violations of environment laws.

"I hereby give notice of 60 days, under Section 19(b) of Environment Protection Act, 1986, of my intention to file a complaint in the court against the concerned regulatory authorities at the Centre and in the State of Andhra Pradesh, as well as the (pharma) company for violation of provisions of the Environment Protection Act of 1986 and the Rules and Regulations issued thereunder," Mr Sarma wrote in his letter to government officials, copies of which have also been circulated to environmental activists and citizens.

Moneylife recently reported how Lohitha Lifesciences had submitted an allegedly fraudulent environment impact assessment (EIA) report. (Read, "Companies procuring false environment impact reports, ministry overlooks fraud, says former top bureaucrat".)  Sections of the EIA report submitted by Lohitha have apparently been blindly copied from another report by a sponge iron factory. But neither the Centre nor the state environmental authorities have taken any action in this case.

Lohitha is also said to have illegally taken up construction of its bulk drug unit in Visakhapatnam district without obtaining environmental clearance. Even a public hearing on the EIA report has not been organised, Mr Sarma said. He has alleged that this serious violation has been overlooked by the central and state ministries and the pollution control board which makes them a party to the wrongdoing.

"None of the agencies, viz. Ministry of Environment and Forests, the state government and AP Pollution Control Board, (APPCB) has ensured cumulative EIA for the project taking into account the total pollution load in the area and the implications of the incremental pollution caused by the project," Mr Sarma says.

The area where Lohitha's new unit is coming up already has a number of industrial units and the new unit will add toxic waste to the environment. "The toxic waste from the unit is proposed to be transferred to Ramky's Coastal Waste Management Unit at Parawada in Visakhapatnam. The performance of that unit has been unsatisfactory as brought out by the Dave Committee appointed by APPCB a couple of years ago," Mr Sarma says.

He said that the instances of environmental violations by Lohitha and other pharmaceutical companies have been brought to the notice of the state and Central ministries, but to no avail.



Avi Shlomo

5 years ago

This company is fraud. I do not see any of their products as drug products or related to drugs. sounds like a charlitan story

Avi Shlomo

5 years ago

wow this is surprising, one of my vendors was thinking to do biz with them and they even offer to fly him for free. I am sure they would have taken him somewhere else. I think the owner is a scam artist for trying to solicity biz and does not yet have a plant. I should tell my friend

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