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Delhi HC rejects Modicorp petition on VSNL divestment

Delhi high court has paved the way for inviting financial bids for privatisation of Videsh Sanchar Nigam as it rejected the petition of Modi Corporation saying it could not participate in the divestment process at this late stage.

Justice Manmohan Sarin said on Thursday in a judgement that Modicorp Ltd had placed their proposal at a belated stage. Also it did not fulfill the eligibility criteria for acquiring the 25 per cent stake in the company.

The government is slated to close the financial bids for VSNL On Friday and the three shortlisted bidders -- Tatas, Reliance and Sterling -- are expected to submit their proposals.

A final decision on strategic partner would be taken by the Cabinet Committee on Divestment at its meeting likely to be held in New Delhi on February 5.

"The petitioner has simply missed the bus and cannot join the journey midway at this belated stage," the court said.

Modicorp's total networth was only about Rs 2.77 billion whereas the eligibility criteria stipulated a networth of Rs 25 billion.

Rejecting the claim of the petitioner that its total worth including the value of promoters' holding was at the threshold of achieving the eligibility criteria, the court said the company had not clarified about any consortia, joint venture company or promoters' stake in its proposals of December 28, 2001 and January 1, 2002.

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