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Mittal knocks on govt doors to tackle statutory dues not fully provisioned for

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Mittal knocks on govt doors to tackle statutory dues not fully provisioned for
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New Delhi: Telecom tycoon Sunil Bharti Mittal on Monday came knocking at the doors of top government officials including Telecom Minister Ravi Shankar Prasad, over billions of dollars in statutory dues like spectrum and licence fee liability that his and other telcos had not fully provisioned in their accounts. Sources said Mittal first met Prasad and then Telecom Secretary Anshu Prakash, apparently over the liability that arises from the Supreme Court upholding government's view on how revenues should be calculated for sharing of statutory dues.

Kumar Mangalam Birla, head of Vodafone-Idea Ltd that also has been severely hit by the apex court ruling, was expected to come for meeting but has now sought a different time, they said.

Delivering its verdict, the Supreme Court had on October 24 upheld government contention that non-core revenue in telecoms groups should be included in adjusted gross revenue -- the figure on which statutory levies are charged.

Sources said the telecom operators are looking at the government for a possible relief such as waiver of penalties and interest though the Supreme Court had categorically stated that companies must pay many years worth of charges plus interest and penalties.

Ideally, companies are required to make provisions in their books for any potential liability that may arise from a legal dispute. While emails sent to Bharti Airtel and Vodafone-Idea on the impact of the Supreme Court judgment and provisioning remained went unanswered, industry sources said provisioning for the full amount was not made. The companies also did not response to a seperate email on meeting with the Government. Also, there is no sight of promoters willing to infuse more equity into the companies to clear the liabilities. According to the DoT's calculations, Bharti Airtel faces a liability of around Rs 42,000 crore after including licence fees and spectrum usage charges while Vodafone-Idea may have to pay about Rs 40,000 crore.

 

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