The Minister for Disinvestment Mr Arun Shourie, secretary DoT, Mr Shyamal Ghosh and disinvestment secretary Mr Pradip Baijal are believed to have told a VSNL delegation last week that the idea was unworkable. "We met them (officials) all separately and they all seemed to have reservations on our demand," said Federation sources who were part of the delegation.

The delegation met Mr Shourie along with other top officials from ministries associated with VSNL's privatisation to press for their demands, one of the prominent one being the retention of the present board of directors. On February 23, the Federation had written to Mr Shourie and telecommunications minister Mr Ram Vilas Pawan asking them to safeguard the interest of the VSNL employees (The Financial Express, February 23, 2001).

"The present board must be retained. It may be broad-based and strengthened by inducting proven talent," the Federation had recommended in the memorandum handed over to the government.

Meanwhile, the government's refusal to retain the board is leading to considerable unease in the VSNL ranks. The general feeling is that the employees' interests can be better served with the current board, rather than without it. "How can the board safeguard the employees' interest when it is not sure of its own future?" asks Mr V S Rama Rao, the Federation's president.

"VSNL may go the Balco way. We have all seen how the entire Board of Directors was asked to resign in Balco prior to privatisation," said another senior Federation office bearer. And should that happen, the fear is that the strategic partner may change the service conditions of employees unilaterally. The current board may just act as a deterrent, it is felt.

VSNL, as on date, effectively has only two full-time directors: Mr Rajneesh Gupta, director, network, and Mr RSP Sinha, director, finance. Director, development, Mr Vinoo Goyal has already resigned recently while director operation, Mr Amitabh Kumar's term expires in April 2001, unless extended further. A full-strength VSNL board is meant to have five full-time directors including the chairman and managing director. There are two representatives from the DoT and four part-time directors (Mr Subodh Bhargava, Mr Ashok Wadhwa, Mr Narayana Murthy and Mr H P Wagle).

The government's refusal to retain the current board adds a further twist to the extension issue of Mr Kumar, held by most in VSNL as the "most retainable by the new management given his seniority, qualifications, and experience." Ever since Mr Kumar's five-year tenure as director operations expired in August 2000, the government has been giving extensions. His last of the two 3-month extensions ended on March 1, when he was given another extension of one month which expires in April.

Should strategic partner get the management control making the present board redundant, the directors will have to be compensated for the unexpired part of their tenure. But then there is also the issue of whether the strategic partner can do without these senior officials who have the advantage of experience with running VSNL. "The strategic partner will need hands who have the knowledge and experience of running the company," said Mr S M Pimpley, all-India president of Federation of Videsh Sanchar Employees Union.