After Bajaj Auto Chairman Rahul Bajaj, now another big businessmen has spoken openly about the Industrial Crisis. Vodafone India chairmen Kumar Mangalam Birla has said that if there is no relief, Vodafone may force to close its business here .
Two days ago, Rahul Bajaj had put a question in front of Home Minister Amit Shah and said that people are nervous about speaking. They feel that there will be no hearing in the government.
Vodafone Idea Limited Chairman Kumar Mangalam Birla on Friday said the company would have to shut shop if no relief is given to it in the wake of the Supreme Court (SC) judgement of 24 October that asked companies like his to pay dues of up to ₹92,000 crores to department of telecommunications (DoT) in three months.
Birla was speaking at the Hindustan Times Leadership Summit here.
“We will shut shop if we don’t get relief,” he said as he went on to say that he couldn’t call his telecom venture a failure.
Birla’s comments were quick to send Vodafone Idea shares tumbling in Friday’s trade, slipping 8.5% on the BSE to ₹6.69. The shares have trebled in less than six months from their 52-week low of ₹2.61. At the same time, the company faces an uncertain future.
Vodafone Idea owes the DoT an ₹40,000 crore while it has a cash balance of half of that. The SC order came in a 14-year-long case which had the DoT claiming that telecom companies had under reported their revenues and thus paid lower spectrum charges and other levies. DoT said that their revenues included income from dividends given by subsidiaries and sale of handsets bundled with services besides other sources. This was unsuccessfully contested by the telecom companies.
The DoT has since already asked the company to do their calculations in anticipation of the payment. Vodafone rival, Bharti Airtel Ltd, which owes DoT ₹21,682 crore in licence fee and another ₹13,904.01 crore as spectrum usage charges, plans to raise up to $3 billion to fund its payments. It too isn’t in the best of health but its future isn’t as bleak as Vodafone’s looks.
The companies have been expecting a relief from the government but none has come so far. A proposed two-year moratorium on dues may not help much.
