ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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KASHMIR-Certificate Denied

for the price to be reduced to the range of Rs 1,100 to Rs 1,200 per share. The foreign managers also raised doubts about VSNL's profitability which, according to market perception, depended on the volatile cost-sharing arrangement laid down by the department of telecommunications. Market reports indicated that the firm Morgan Stanley, which was initially favoured for the lead manager status and replaced at the last minute by the joint global co-ordinators, Salomon Brothers and Klein wort Benson, apparently carried on a campaign to denigrate the issue. A secret document circulating in the European markets, hinting at a number of problems with the VSNL issue, has been attributed to the above source. It has also been suggested that the company's shares are overvalued in the domestic share markets, that the VSNL's profits would be much lower now because as a corporation it would have to pay corporate tax while earlier it was paying only annual dividend to the general revenues. Further, it has been revealed, obviously to the dismay of foreign investors, that there were serious differences between the minister of state for telecommunications, Sukh Ram, and the Telecom Commission chairman, N Vittal and, further, that no drastic reform in the direction of privatisation would take place until teledensity had reached 3 per cent, probably by the turn of the century. All these factors have obviously played a role in forcing the government to postpone the VSNL issue.

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