New Delhi, July 4 Urging the government not to agree to Vodafone Idea's plea to defer the April 2022 deadline for payment of Rs 8,292 crore spectrum installment, non-profit body 'Telecom Watchdog' has said that such requests are "unjustified" and "illegal".
In a letter to the Minister of Communications, the organisation has demanded a forensic audit into the affairs of the telecom operator.
"We are astonished with the request of VIL to defer payment of Government dues, due to its inability to raise funds which clearly establish its mismanagement of affairs in terms of operation and financial management. It has miserably failed to raise funds by dilution of equity and upgrade its networks with latest technology to reduce cost etc," said the letter by Telecom Watchdog Secretary Vikram Mittal.
The NGO further expressed surprised over reports that the Department of Telecommunications is considering the request at a time when the country is striving hard to deal with the economic impact caused by Covid-19 pandemic and the country is making all-out effort to raise additional resources to address this situation.
It said that the deferments in payment of government dues are sought by misleading with incorrect facts and despite financially sound promoters.
"Even on merits, further concessions as requested by Vodafone Idea should not be considered as there cannot be any factually incorrect misleading statements than those given by VIL on financial health of the Indian telecom sector," Mittal said in the letter.
He suggested that no government support or intervention in the matter of tariffs should be considered as such steps will cause losses to the government and harassment to the consumers and would not help this company to survive.
Further, the telco should be advised to infuse additional equity in the company or make serious effort to raise additional funds by dilution of existing equity for fresh investment in upgradation of their network and increase its operational efficiency.
"To sum up, there is no merit in submission of Vodafone Idea Ltd to defer payment of next instalment of Government dues and should be rejected forthwith. Further, a forensic audit should be ordered by the Government into the affairs of the company."
Last month, VIL, in a letter to the Telecom Secretary, had said it will be unable to pay the installment of Rs 8,292 crore due on April 9, 2022 due to cash being used for payment of Adjusted Gross Revenue (AGR) dues and the inability of the operations to generate the required cash in a predatory pricing situation.
It has sought another year of moratorium, so as to pay the installment in April 2023.
For the January-March quarter, Vodafone Idea reported a net loss of Rs 6,985.1 crore. Auditors of the company have raised concerns over its survival as a 'going concern'.
In his comments regarding the financial results, Vodafone Idea Ltd MD & CEO Ravinder Takkar said: "We are in active discussion with potential investors for fund raising, to achieve our strategic intent."
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