AP co blamed in payment dispute

Hyderabad, Feb. 8: Hyderabad-based Prithvi Information Solut-ions has gotten into a bitter dispute with its Japanese supplier Sojitz Corporation.

The dispute is over an equipment supply contract to BSNL, worth Rs 190 crore. Sojitz alleges that Prithvi has diverted payment made by the client. It has filed a case of criminal breach of trust against Prith-vi in a district sessions court in Hyderabad and the case has also been referred to for arbitration in Singapore. Prithvi claims that it has suffered a loss of Rs 150 crore due to delays in equipment supply by Sojitz.

In 2007, Prithvi entered into an agreement with Sojitz to supply telecom equipment to BSNL. Prithvi initially asked BSNL to pay the money in an account that was jointly operated with Sojitz.

In November 2008, Prithvi amended the conditions and instructed BSNL to not deposit the money in the said account. Sojitz claims this is a criminal breach of trust and says it is owed Rs 190 crore. However, a senior official from Prithvi has termed it as a commercial dispute.

Prithvi is the company that’s dealing with BSNL and as such, its our prerogative to tell them where to transfer the money, the official said.

In an emailed statement, Prithvi said “The company refutes the allegations that there is any diversion of money from an escrow account entered between Prithvi, Sojitz and PNB and there was no breach of escrow agreement.”

The statement adds, “The company further states that Sojitz is a supplier to them and there has been a breach in the supply agreement on the part of Sojitz, consequently to that the dispute is being resolved in the court in terms of the contract between Prithvi and Sojitz”.

A Prithvi official claims that despite the losses it has suffered, it has already paid Rs 30 crore to Sojitz and is negotiating for the remainder. However, Sojitz has walked out of the talks, it is learnt.