Kumar Mangalam Birla has stepped down as the non-executive member and non-executive chairman at Vodafone Idea. On August 4, 2021, the board accepted Birla’s request to make this move and has elected Himanshu Kapania — a veteran in the telecom industry who is currently a non-executive director and non-executive chairman at the company — to take his place.
The board has also appointed Sushil Aggrawal, a nominee in the Aditya Birtla Group, as an additional director at Vodafone Idea.
Last month, Birla had written to the Government to support the Company as it is under heavy debt, and required aid to keep the telecom company afloat in the market. Now, with the Supreme Court rejecting the plea of the Company to correct the pending dues, the very survival of the Company is under question. Moreover, the liabilities of Vodafone Idea increased when the Supreme Court allowed the Government to levy statuary dues on the non-core revenues of the Company.
As per ICICI securities, the Company’s liabilities stand at Rs 23,200 crore, which is due to be paid within the next 12 months. In contrast, the Company’s cash and cash-equivalent assets stand at Rs 350 crore and land and tax refunds account for Rs 3000 crore. Earlier, telecom companies including Vodafone Idea, Tata Teleservices, and Bharti Airtel pleaded with the Supreme Court to r- calculate the statuary debts to the telecom department, their plea had been dismissed on July 23.
In 2019, the Supreme Court passed a verdict allowing non-core revenues to be included in the statutary dues ending a 14-year long battle on the definition of AGR (Adjusted Gross Revenue). This increased the liabilities of companies such as Vodafone Idea and Bharti Airtel to more than Rs 90,000 crores.
With the stepping down of Birla, the stock price of Vodafone Idea also slid 34 per cent in three days.