To add to the government's woes, the VSNL GDR is currently trading at around $10, a discount of 28.2 per cent to its issue price of $13.93 (Rs 1,000 when the GDR took place). Even in the domestic market the VSNL scrip is trading in the range of Rs 810 to Rs 830 and has not crossed the Rs 900-mark (the price at which the government was planning the domestic offering) ever since the company submitted its application to Sebi last year. And analysts say that the price will take a further beating once thegovernment announces the concrete timetable.

The centre has declared its intention to raise Rs 5,000 crore this fiscal through disinvestments in VSNL, GAIL, Concor and IOC and it is understood that the VSNL GDR would be the first off the block. However, given the present circumstances in VSNL, analysts say that the government will be unable to get a price anywhere close to what it got during the previous round of its GDR issue.

It is understood that the present GDR investors, who hold about 20 per cent of VSNL's Rs 95-crore equity, are already asking the company as to why the government has not appointed a chairman and managing director to replace Syngal, who was denied an extension when his term expired on June 30, 1998.

In addition, the company has not had a director, finance, for the past five years, except for a brief three-month period when it was going for its GDR issue. At that time, the government appointed Annie Moraes of the Department of Telecommunications (DpT) as VSNL's director, finance,who was promptly transferred back to DoT as soon as the $526-million GDR issue was successfully completed.

Besides, the government is yet to appoint a replacement for RK Gupta who was VSNL's director, development, till February, 1998, when he left the company to join Inmarsat. Also, the post of director, networks, has been lying vacant for almost a year now.

Besides this the government is yet to fulfill the promises it made to the investors during the previous round of its GDR issue.

The centre had promised that it would clear VSNL's $500-million regional hub project. This project is still hanging fire with no decision in sight. Besides, the VSNL board was to be broadbased with the induction of outside directors and the new board given additional powers as part of the `Navaratna' package. In addition, the government had also promised to come out with a domestic offering, which was initially slated for late last year and subsequently postponed to early this year.

Instead of fulfilling the promises madeto the investors, the government has actually broken some of them, especially that of protecting VSNL's international telecom monopoly till 2004. As part of the recommendations of the National Task Force on Information Technology, which were subsequently adopted by the government, the monopoly of VSNL on international gateways has been broken. The government has allowed private Internet service providers to set up their own international gateways, thus bypassing VSNL on the way.