In a groundbreaking move by the Department of Telecommunications (DoT), Bharti Airtel (Company) has been given approval by DoT Bharti for increasing the limit of foreign investment upto 100% of the paid up-capital of the Company. 41% stake of the company is held by Bharti Telecom, while foreign promoter entities hold 21.46% with 37% public shareholders.
Bharti Telecom applied for infusion of Rs. 4,900 crores in the Company which includes investments from Singtel and some other foreign investors. With this Bharti Telecom will become a foreign entity as majority stake will be held by overseas investors.
The approval comes few days before the Company has to clear statutory liabilities of up to nearly Rs. 35,586 crores, of which Rs. 21,682 crores is licence fee and another Rs.13,904.01 crores is spectrum dues (excluding the dues of Telenor and Tata Teleservices). In a time of crisis when the AGR verdict has put the Company under huge pressure, this approval provides them with a sigh of relief.
A full Bench of the Supreme Court comprising Justice Arun Mishra, Justice S. A. Nazeer and Justice M.R. Shah heard the review petition filed by Airtel, Vodafone-Idea against AGR verdict on Rs. 92,000 crores, past dues in closed chambers.The matter pertains to DoT’s claim that the companies had underreported their revenues, as a result paying less tax to the government.
The petition was filed with Supreme Court to review its order dated 24 October, 2019 which mandated the telecom companies to pay the hefty sum of INR 92,000 crores in dues and interest to the DoT. The case has been ongoing for 14 years now. Tata Teleservices and Hughes Communication India have also filed a review petition. There is an ongoing merger between Tata Teleservices and Bharti Airtel, which is opposed by DoT.
Author: Nandini Gandhi