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What is the story about?
The Supreme Court has adjourned its hearing for Vodafone Idea Ltd.'s additional adjusted gross revenue (AGR) dues plea to next Monday, October 13, after the Centre sought more time.
The Vodafone Idea counsel said the company did not object to the same, adding, "We are not opposed to the grant of more time to the government, we want to celebrate Diwali this year."
The Supreme Court was to give its verdict on the telecom company's plea on Monday, October 6, after previously setting new dates for the hearing twice in the past month.
On another note, news agency Bloomberg reported that the Centre is weighing on a resolution for Vodafone Idea dues to bolster UK ties. The government is considering a one-time settlement, the news agency reported. The resolution may come via waiver of interest and penalties, which will be followed by a concession on the principal, Bloomberg reported, adding that the government officials are drafting the framework.
September 19: The Centre told the Supreme Court that it does not oppose Vodafone Idea's plea, but some solution is required as it too is an equity holder in the company. The Supreme Court observed there had to be some finality to these proceedings and deferred the hearing of the plea to September 26.
September 26: India's Solicitor General Tushar Mehta, representing the Department of Telecom (DoT) on behalf of the Centre, sought more time from the Supreme Court. Vodafone Idea said it had no objections to the government seeking more time. The top court delayed its verdict to October 6.
October 6: The Supreme Court adjourns Vodafone Idea's AGR plea to October 13 after the government seeks more time.
October 13: The Supreme Court will give its verdict on the Vodafone Idea AGR plea after changing the hearing dates thrice in the past monht,
The debt-laden telecom company's plea is against the Department of Telecom's additional AGR demand. Its petitioned to the top court to set DoT's demand for ₹9,450 crore in additional AGR dues, arguing that it is beyond the scope of the court's previous ruling on AGR liabilities.
As per reports, the DoT had previously filed an affidavit defending its stance, saying the additional dues were a 'gap' from previous accounting and not a reassessment. It maintained that these liabilities emerged after the competition of financial accounts and were not covered under the top court's 2019 judgment.
A total of the ₹2,774 crore of the ₹9,450 crore comprises the FY18-19 dues of the merged identity Vodafone IDea and Idea group after their consolidation in August 2018. As much as ₹5,675 crore is with regards to the pre-merger Vodafone Group.
Vodafone Idea contested the calculation, claiming some amounts were duplicated. It sought fresh reconciliation starting pre-2017.
In August, Chandra Sekhar Pemmasani, the minister of state for communications, told CNBC-TV18 that the government is not looking at extending any additional relief to the financially-stressed telecom company.
Referring to the 2021 support package, as per which around ₹53,000 crore of dues were converted into equity, giving the Centre a 49% stake, Pemmasani said, "Whatever we wanted to do has already been done. Vodafone is up to their management… they know how to manage and it's up to them to take it forward."
The government is the largest stakeholder in the telecom company. However, it is not classified as a promoter.
In July, telecom minister Jyotiraditya Scindia told CNBC-TV18 that the Centre did not have any plans to convert Vodafone Idea into a public sector undertaking (PSU).
After the Supreme Court delayed its hearing on September 19, brokerage firm Citi called the Vodafone Idea stock a "high-risk" buy with a price target of ₹10 apiece.
Shares of Vodafone Idea declined 5% on Monday. The stock was down 4.4% at ₹8.43 apiece around 12.20 pm.
The stock has gained nearly 15.6% in the past month.
Also Read: Nykaa shares in focus after Q2 update points to GMV growth in the 'thirties'
The Vodafone Idea counsel said the company did not object to the same, adding, "We are not opposed to the grant of more time to the government, we want to celebrate Diwali this year."
The Supreme Court was to give its verdict on the telecom company's plea on Monday, October 6, after previously setting new dates for the hearing twice in the past month.
On another note, news agency Bloomberg reported that the Centre is weighing on a resolution for Vodafone Idea dues to bolster UK ties. The government is considering a one-time settlement, the news agency reported. The resolution may come via waiver of interest and penalties, which will be followed by a concession on the principal, Bloomberg reported, adding that the government officials are drafting the framework.
Timeline of delayed hearings
September 19: The Centre told the Supreme Court that it does not oppose Vodafone Idea's plea, but some solution is required as it too is an equity holder in the company. The Supreme Court observed there had to be some finality to these proceedings and deferred the hearing of the plea to September 26.
September 26: India's Solicitor General Tushar Mehta, representing the Department of Telecom (DoT) on behalf of the Centre, sought more time from the Supreme Court. Vodafone Idea said it had no objections to the government seeking more time. The top court delayed its verdict to October 6.
October 6: The Supreme Court adjourns Vodafone Idea's AGR plea to October 13 after the government seeks more time.
October 13: The Supreme Court will give its verdict on the Vodafone Idea AGR plea after changing the hearing dates thrice in the past monht,
The plea
The debt-laden telecom company's plea is against the Department of Telecom's additional AGR demand. Its petitioned to the top court to set DoT's demand for ₹9,450 crore in additional AGR dues, arguing that it is beyond the scope of the court's previous ruling on AGR liabilities.
As per reports, the DoT had previously filed an affidavit defending its stance, saying the additional dues were a 'gap' from previous accounting and not a reassessment. It maintained that these liabilities emerged after the competition of financial accounts and were not covered under the top court's 2019 judgment.
A total of the ₹2,774 crore of the ₹9,450 crore comprises the FY18-19 dues of the merged identity Vodafone IDea and Idea group after their consolidation in August 2018. As much as ₹5,675 crore is with regards to the pre-merger Vodafone Group.
Vodafone Idea contested the calculation, claiming some amounts were duplicated. It sought fresh reconciliation starting pre-2017.
Centre's view
In August, Chandra Sekhar Pemmasani, the minister of state for communications, told CNBC-TV18 that the government is not looking at extending any additional relief to the financially-stressed telecom company.
Referring to the 2021 support package, as per which around ₹53,000 crore of dues were converted into equity, giving the Centre a 49% stake, Pemmasani said, "Whatever we wanted to do has already been done. Vodafone is up to their management… they know how to manage and it's up to them to take it forward."
The government is the largest stakeholder in the telecom company. However, it is not classified as a promoter.
In July, telecom minister Jyotiraditya Scindia told CNBC-TV18 that the Centre did not have any plans to convert Vodafone Idea into a public sector undertaking (PSU).
Stock performance
After the Supreme Court delayed its hearing on September 19, brokerage firm Citi called the Vodafone Idea stock a "high-risk" buy with a price target of ₹10 apiece.
Shares of Vodafone Idea declined 5% on Monday. The stock was down 4.4% at ₹8.43 apiece around 12.20 pm.
The stock has gained nearly 15.6% in the past month.
Also Read: Nykaa shares in focus after Q2 update points to GMV growth in the 'thirties'
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