Supreme Court on Thursday is hearing a petition filed by the Department of Telecommunications (DoT) to allow telecom companies to make staggered payment for their Adjusted Gross Revenue (AGR) dues. A three-judge bench comprising Justices Arun Mishra, S. Abdul Nazeer & MR Shah is hearing a plea by the Department of Telecommunications for staggered payment of AGR Dues by Telecom companies.<\/p>\n
Here are the latest updates from the AGR hearing from the Supreme Court today:According to Rajiv Sharma of SBICAP Securities, the only option left for Vodafone Idea to pay the dues is a staggered payment over the period of 20 years.\u00a0\u201cThey are rightly suggesting that there have been losses and they need more time and they need to protect market shares otherwise the rest two will be taking market shares so it is a 20 years’ window that is the single possible solution here, anything lower looks difficult and personal guarantees where it seems the court is heading towards too – I think that will be very difficult to furnish from Vodafone perspective,” said Sharma.
\nReacting on today’s AGR due hearing, telecom consultant Sanjay Kapoor said: \u201cThis is very much on the expected lines if you recall the last argument that happened, operators were pretty clear that they have made some submissions of the AGR dues which is on self-calculation and the balance that spectrum should be considered as security and their existing bank guarantee should be. So from their side, they will try ad justify that \u2014 now the matter is sub judice it will not be correct on my part to even utter a word but the courts have to see whether that is palatable.\u201d
\n\u201cAs far as operators are concerned clearly the fact that they have listed companies and the structure of the companies is such that personal guarantees are not something that they will be in favour of and therefore they will try to justify their ground on these,\u201d Kapoor added.SC AGR dues order: Here are the main points
\n– We have considered the submissions made by telcos have sought more time.<\/p>\n
-On the issue of furnishing undertaking, have deferred the hearing to third weekend July.<\/p>\n
-DOT had sought time to consider the telcos proposals, will allow time till third week of July.<\/p>\n
-SC directs for telcos to submit financial docs.<\/p>\n
The hearing concludes.Arvind Datar for Tata to SC: Consider it a joint submission from all telcos that bank guarantees would be unfeasible.
\nFurnishing of bank guarantees will have an adverse impact of further investments in the sector<\/p>\n
Are being required to pay not just the principal, but interest and penalty.Rohatgi for Vodafone to SC: We appreciate the suggestion from the court, allow us 2 weeks to confer with the management of the company and will get back.
\nSC observes: This is the only industry that has done business during the lockdown.
\nShould deposit a reasonable amount. It must make a payment, the government needs money for running the country, for public welfare.SC observes: There has to be a provision for the down payment to avail of staggered payments. \u00a0A need to show bonafide to claim benefits of staggered payment. Vodafone-Idea must work something out to come with some offer. A reasonable amount needs to be paid upfront. Not possible for us to pass orders without reasonable upfront payment.
\nRohatgi for Vodafone Idea to SC: Dues claimed are over Rs 50,000 crore, how can I ask independent directors to furnish personal guarantees.
\nSC observes: All your assets are charged (Voda Idea), you say you are a foreign company, what if you walk away, leaving your assets here.
\nThere has to be mutual trust.<\/p>\n
What about personal guarantees by directors?Rohatgi for Vodafone to SC: Assets are worth Rs 42, 000 crore, have been charged as securities to secure borrowing of over 1 lakh crores.
\nRohatgi to SC: We’ll deposit all documents to manifest that Voda is not making profits.
\nThe ship is barely afloat, the only way to pay AGR dues is to stagger payments over 20 years.<\/p>\n
Have to earn and pay, the only way.SC observes \u2014 How has Vodafone made provisions of 52000cr of contingent liabilities if not making any money?
\nRohatgi: Payment in installments is the only way.
\nJustice Mishra: Place on record your balance sheets and income tax returns.<\/p>\n
Rohatgi: I can place all these documents.<\/p>\n
Justice Shah: Place these contingent liabilities which are on your books of account.Rohatgi: If I pay more, I will have nothing left. I have 11000 employees. Will not be able to pay them.
\nMeanwhile, at 12:07 pm, Vodafone Idea’s shares slipped over a percent lower to Rs 9.70 on the NSE.Rohatgi for Vodafone Idea to SC:\u00a0I have no security or proposal to give. The only proposal is to work and pay the AGR dues. Have bank guarantees of Rs 15, 000 crore that can be considered as a security.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court on Thursday is hearing a petition filed by the Department of Telecommunications (DoT) to allow telecom companies to make staggered payment for their Adjusted Gross Revenue (AGR) dues. A three-judge bench comprising Justices Arun Mishra, S. Abdul Nazeer & MR Shah is hearing a plea by the Department of Telecommunications for staggered payment […]<\/p>\n","protected":false},"author":1,"featured_media":57956,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[47104],"class_list":["post-59845","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-top-law-news","tag-supreme-court-agr-case-hearing-highlights"],"yoast_head":"\n