Calcutta, June 19: ITC has withdrawn its offer to provide a ‘goodwill assistance’ of $ 26 million (Rs 122 crore) to ITC Global, the Singapore-based trading arm, which is under the administration of judicial managers appointed by the High Court of Singapore.
ITC Global owes around $ 50 million to various creditors. Though ITC does not accept any legal liability for its Singapore-based subsidiary, it had offered to pay $ 26 million with the “intention of preserving the goodwill of the international banking and other investing communities”.
Earlier, ITC landed in trouble with the Enforcement Directorate for offering to pay the amount. The directorate had said the offer was in violation of the Foreign Exchange Regulation Act (Fera), though ITC had said it would seek the approval of the RBI and its shareholders for it.
However, while a draft agreement for the payment was being discussed, the judicial managers of ITC Global made some strong remarks about ITC in a letter written by its lawyers. Virginia House claims the allegations made in that letter were “baseless and unwarranted”. ITC said it would pay the promised amount only if the judicial managers of ITC Global tendered “an unconditional apology”.
Though ITC was initially led to understand that the judicial managers of ITC Global would comply with this condition, they were later advised that the administrators of the Singapore-based company was contemplating legal action. Thereafter, ITC withdrew its offer to pay $ 26 million, and also obtained RBI’s permission to write off its $ 10 million export receivable from ITC Global, which indicates that ITC is slowly washing its hands of its beleaguered subsidiary.
The infotech subsidiary of ITC — ITC Infotech (India) Ltd or I3L — is foraying into the customer management solutions business in partnership with a US firm. I3L has signed a joint venture agreement with ClientLogic Operating Corporation — a US firm that provides customer management solutions to clients like Sony and Hewlett Packard — to provide call centre services out of Bangalore.
ITC says, its infotech subsidiary is in the “concluding stages of negotiation” with ClientLogic for setting up a call centre in India. ITC Infotech proposes to contribute Rs 15 crore towards the equity of the joint venture firm — called CLI3L e-Services Ltd — on signing the shareholders’ agreement with its partner.