InvestorQ : Why is the Supreme Court not deciding on the AGR case quickly? It will give greater clarity to Bharti Airtel and Idea?
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Why is the Supreme Court not deciding on the AGR case quickly? It will give greater clarity to Bharti Airtel and Idea?

Answer
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Neelam Naik answered.
2 months ago


In a way the Supreme Court is correct that in the entire debate, the concept of fairness to the government revenues has not been considered. If the IBC process goes through as it is, government could lose out Rs.40,000 crore of unpaid spectrum and AGR charges.

Supreme Court has promised to give its final verdict on the telecom AGR case on 24 August but it hardly looks like this could be decided so easily and quickly. There are just too many new dimensions to the case and even the government may want to extract the most.

The SC is right in the sense that there is still a lot of telecom dues pending and this is the time to take the bull by the horns and sort out the issue. Once the IBC cases are closed and done with, then there is not much scope to go ahead and recover monies.

Clearly, it is going to be a slow process. It is nearly a year since the order against telecom companies on the AGR issue was passed. While Bharti Airtel has paid one-third of the AGR dues, Idea has paid a little over one-tenth of the outstanding amount. Tata Tele paid a part.

The bigger issue that SC is grappling is about bankrupt telcos like RCOM, Videocon and Aircel. The stakes are big because these three owe the government Rs.40,000 crore. SC wants to know if the acquirer will take on the liability of the bankrupt companies.

There is a catch in the IBC process. Under IBC, full powers are with the COC, which agreed on a model that suited the financial creditors the most. Can the government be classified as an operational creditor? These are stick questions that will come up.