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Money > Reuters > Report April 20, 2001 |
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'Ban not to hurt BPL's telecom plans'The four-year ban on raising funds by issuing new shares slapped on BPL Ltd will not affect BPL Communications, the main vehicle for the diversified group's ambitious foray into India's deregulated telecom business. The Securities and Exchange Board of India imposed the ban on Thursday following an investigation into alleged rigging of the share prices of BPL and two other companies which caused a payments crisis on the Bombay stock exchange in 1998. The ban will not affect BPL Communications as it is not a subsidiary of BPL Ltd, company officials said. "There won't be an impact. BPL Communications is a separate company in which I along with family members own a 60 per cent stake while the rest is owned by foreign investors," Rajeev Chandrashekar, the firm's chairman, said. "I am not even on the board of BPL," said Chandrashekar, who is the son-in-law of BPL group chairman T P G Nambiar. Sebi's order affects BPL Ltd, the group's flagship company and one of India's leading makers of consumer appliances and colour televisions. Through BPL Communications, the group also has large stakes in the Indian telecoms business. BPL Mobile Communications Ltd is the largest cellular service operator in Bombay, while another group firm, BPL Cellular Ltd, operates cellular networks in the states of Maharashtra, Kerala and Tamil Nadu. Major plans The group has ambitious telecommunications expansion plans. Both the cellular firms have bid for 26 licences to provide fixed-line service after that business was thrown open to unlimited competition earlier this year. Those licences, if granted, could cost the group Rs 9 billion just in entry fees. Earlier this month, a consortium comprising BPL Communications and three other companies bid for a controlling stake in Videsh Sanchar Nigam Ltd, a state-run monopoly provider of international telecom services. And on Friday, a domestic financial daily reported BPL Communications is in talks to buy broadband services provider Spectranet. With so many plans, the group needs to amass a war chest of billions of rupees to fund its ambitions. Will the SEBI order spoil those plans? Chandrashekar says no. "We can always go to our existing shareholders. They have deep pockets," he said. The group's telecom firms have an impressive array of foreign investors who have sunk funds into both the holding company and the two operating companies. Foreign investors in holding company BPL Communications include American Insurance Group and Commonwealth Development Corp. As for the operating arms, France Telecom holds a 26 per cent stake in BPL Mobile Communications, while MediaOne -- which was bought by US telecoms giant AT&T, owns 49 per cent of BPL Cellular. YOU MAY ALSO WANT TO SEE:
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