Vodafone Idea has accepted the request of Aditya Birla group Chairman Kumar Mangalam Birla to step down as their non-executive director and non-executive chairman of the Board on Wednesday (4th August 2021).
Vodafone Idea shares tanked to 34 percent in 3 days, after the announcement. The stock was facing a downward trend ever since May 2020. Birla who holds 27% stake said without any active support of the government VIL will come to an “irretrievable point of collapse”
Birla was offering up debt-laden Vodafone Idea Ltd (VIL) to the government or any other entity that the government may consider worthy enough to keep the company operational. He was even willing to give up his stakes, he said in the letter.
This offer was made in June, by a letter sent to Rajiv Gauba, Cabinet Secretary. VIL owns nearly Rs 60,000 crore to the Department of Telecom (DoT) as adjusted gross revenue (AGR). Out of which the company has paid Rs 7,854.37 crore and Rs, 50,399.63 crores is still remaining.
What is AGR?
Simply put AGR is a ‘revenue-sharing fee’ shared between the government and Tele companies. Under this Tele, companies are supposed to pay a fee (a percentage of their share) as a liability to the government.
There has been a dispute between the two over the definition of AGR for more than a decade now. The government states that it includes revenues from both telecoms as well as non-telecom services, while the latter argues that it should indulge only core services.
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The Supreme court sided with the government’s view on October 24, 2019. This was a heavy setback for telecoms as they were exposed to charges by the Department of Telecom (DoT) of more than Rs 1 lakh crore.
The telecom firms’ pleas were dismissed, leaving Vodafone and Idea in a mess. According to reports by Business Standard, Vodafone Plc owns a 45 percent stake in Vi and is willing to offer its stakes for free to banks or BSNL, on a condition that it takes over the telephone company.
If BSNL takes over the company, the dues that are to be paid will be merged into a BSNL-Vi entity and it should be a book entry.
After Kumar Mangalam Birla, the company has appointed Himanshu Kapania, as their non-executive chairman who was in the position of non-executive director. Further, the board has appointed Sushil Agarwal, as their Additional Director (Non –Executive, and Non-Independent) which will be in effect from August 4, 2021.
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Sources: Financial Express, India Today, Business Standard, +More
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This post is tagged under: Vodafone, Idea, shares, stocks, downtrend, Aditya Birla Group, Kumar Mangalam Birla, Chairman, announcement, government, VIL, Business Standard, merged, position, non-executive director, BSNL-Vi, BSNL, telephone, banks, telecom, Department of Telecom, Supreme court, AGR, percentage, revenue-sharing fee, Rajiv Gauba, collapse, operational, letter, Himanshu Kapania, Sushil Agarwal
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Informative
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