In a major setback to telecom operators in India, the Supreme Court has passed an order recognising the payment of entry fee as well as variable annual licence fee under New Telecom Policy of 1999 as capital expenditure.
Vodafone Idea Chairman Kumar Mangalam Birla on Friday said that the telecom company will have to be shut down if the government doesn’t provide relief that the company has sought.
The stock touched an intraday low of Rs 6.66 as against the previous close of Rs 7.31 on the BSE.
“We will have to shut shop,” Birla said on a query about the course of action for the company going ahead in the absence of government relief.
Birla made the statement during his address at the Hindustan Times Leadership Summit here in New Delhi.
Birla indicated that his group will not invest any money in the company in the absence of relief from the government.
“There is no sense that good money should follow bad money,” he said. Birla said the company will have to opt for insolvency route in the absence of relief.
On October 24, Supreme Court (SC) directed telecom companies like Vodafone Idea to pay their dues of up to ₹92,000 crore to department of telecommunications (DoT) within a period of three months. Of the total amount, Vodafone Idea owes the DoT ₹40,000 crore while the company’s cash balance is half of the amount.
(With input from agencies)