0

0

0

0

0

0

0

0

0

This article is more than 3 month old.

Vodafone Idea warns it may go under if AGR dues 'errors' are not fixed

Mini

Vodafone said the DoT's alleged arithmetical error would cost the company Rs 25,000 crore, forcing it to a point of no return. It has approximately 27.33 crore subscribers, as of June 2021.

Vodafone Idea warns it may go under if AGR dues 'errors' are not fixed
Vodafone Idea (Vi) said it was a “travesty of justice” and inconceivable that the Supreme Court disallowed "errors" in adjusted gross revenue (AGR) calculations from be corrected. The ruling will cost the company Rs 25,000 crore and force it to "go under," Vi said, according to a report in Economic Times.
The telecom company filed a petition on August 10 to review the top court’s July 23 order of not allowing correction of alleged mistakes in the telecom department’s AGR calculations. Vi said it had no intention to “wriggle out” from paying its AGR dues as per the order. But if arithmetical errors were not rectified, they would have to shut shop. That would hurt around 280 million subscribers, nearly 20,000 direct and indirect employees, retailers, banks, and the government.
In its petition to the Supreme Court, Vodafone said, “It is inconceivable that even errors, additions by the respondent-Department of Telecommunications (DoT) to the AGR dues, have not been allowed to be corrected. It is a travesty of justice that the petitioner is restrained from questioning arithmetical errors, which are going to cost the petitioner around Rs 25,000 crore (Rs 5,932 crore of principal plus interest, penalty, and interest on penalty)."
It added that “the impression of this… court that the petitioner is seeking to wriggle out of the orders on account of recalculation is completely misplaced, as would be evident from the error and mistakes illustrated before this... court.”
The company also said it was neither the intention of DoT nor the court to see the government "unjustly benefit" from excess adjusted gross revenue dues.
Vi’s review petition was filed within weeks of the Supreme Court declining its earlier appeal to look into alleged arithmetical mistakes made by DoT, therefore confirming the AGR dues at Rs 58,254 crore, of which around Rs 7,854 crore has been paid.
They said that there was double counting by the telecom department and further, some payments were not included. The company’s own calculations put the AGR dues at Rs 21,533 crore, which was disallowed by the court.
The telco said it is already struggling to survive and remain as the third private wireless telecom operator in the country.
Vi said this may push it out of contention, and its approximately 27.33 crore subscribers, as of June 2021, will be left high and dry. It will lose its investment of lakhs of crores of rupees in the business; and around 10,000 direct workers, 10,000 associate employees, 1,00,000 distributors, retailers and store staff will lose their jobs.
Many leaders have been asking the government to take steps to save the telecom company. Last week, Vi lenders met DoT and said converting debt into equity was an option, but the carrier has not defaulted on any payments till now. They added that the government would stand to lose a lot more than banks if Vodafone Idea crashes.
Last week, Aditya Birla Group’s chairman Kumar Mangalam Birla stepped down from the telecom’s board. The move came less than two months after he wrote to the government offering to hand over the group’s stake in Vi to any public or domestic sector entity. He had stated that without the government’s support, Vi would be driven to a point of no return.
next story