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SC AGR hearing LIVE: R-Jio, RCom ordered to share deal details; ‘You used spectrum, pay money’, telcos warned – The Financial Express

DoT estimates that telecom companies owe a total of Rs 1.19 lakh crore, of which it has received Rs 26,896 crore so far, with balance at Rs 92,520 crore.

SC AGR hearing LIVE: The Supreme Court came down heavily on telecom companies on Friday, seeking to know who was using the spectrum. Justice Arun Mishra told Reliance Jio counsel that spectrum is government property, not private property and anybody using it is liable to pay. Justice Mishra told Jio’s counsel, KV Vishwanathan, that it will recover everything from him. “We will catch hold of you and recover the entire amount,” Justice Mishra said. Vishwanathan informed that he is sharing and not using it, also spectrum usage charges have been paid. The SC asked the Department of Telecommunications (DoT) to clarify if a nod was given to Reliance Jio to use the spectrum. “It’s government property, someone will be purchasing spectrum. What nonsense is this?” SC said. RCom’s resolution professional Shyam Divan said that Reliance Communications and Reliance Jio deal didn’t fructify as the prospective buyer refused to give the undertaking to pay RCom debts. “Why Reliance Jio sale fell through? Who is using this RCom spectrum? We are interested to know this,” Justice Arun Mishra asked.

Reliance Communications shares hit 5% upper circuit and settled at Rs 2.39 apiece. The stock quoted intraday’s low of Rs 2.17 apiece.

Check prices: Reliance Communications

While SC hearing on AGR dues was underway during market closing, Vodafone Idea share price fell 1.22 per cent to end at Rs 8.93 apiece on Friday.

Check prices: Vodafone Idea

Bharti Airtel share price settled 1.26 per cent lower at Rs 528.90 apiece on BSE. The stock quoted intraday high of Rs 542.55 and low of Rs 525.10.

Check live prices: Bharti Airtel

Resolution professional for insolvent telcos to furnish details on the use of spectrum. RP for R Communications and Aircel to also share details on which entities have placed bids under IBC.

“We have been given to understand that Reliance Communications spectrum is being used by Reliance Jio,” SC ordered. RCom, RJio have been directed to submit details of spectrum sharing agreement.

The agreement with respect to the spectrum being used by RJio, has to be placed on record, says Supreme Court

We are not bound by any order of NCLT or NCLAT, says SC. The matter will be taken up on Monday at 3 PM

All documents wrt spectrum, who is using it, etc should be filed by Monday, says Justice Mishra

Revenue will be wiped out if spectrum is sold. The person using the spectrum should be liable to pay. Why should RJio not pay? They have been using it for the past 4 years. “We will catch hold of you and recover entire amount,” Justice Mishra tells Reliance Jio’s lawyer

SC asks govt to file an affidavit wrt NOC, etc. Affidavit to be filed by an officer not less than a joint secretary level. “This is our child. We have to take care of it,” says SC. Posts matter for further hearing on Monday.

This is a sovereign right. Whether this right of revenue sharing can be transferred. The public has the right. You can earn anything after making payment. The payment on natural resources stands on a different footing, says SC

SC says DoT should clarify if nod was given to Reliance Jio to use spectrum. It’s government property, someone will be purchasing spectrum. What nonsense is this? A person using a spectrum should pay.

“I am not using it. I am sharing it and spectrum usage charges are being paid on this,” KV Vishwanathan said to the bench

Vishwanathan, who has appeared for Reliance Jio, tells the Court that Jio has paid it’s AGR dues but on this question, he will need time to take instructions.

“Why Reliance Jio should not be liable for entire dues since 2016?,” Justice Arun Mishra asked

“How can you avoid liability? This is a revenue-sharing regime. We will catch hold of you and recover everything. This is not your private property. This is government property. This is a public interest,” J Mishra tells RJio counsel KV Vishwanathan 

“We need to know from DoT that NoC is to be given. This is government property. Someone is using this property is liable to make payment. What nonsense is going on,” says Justice Arun Mishra.

“AGR dues are to be protected. Spectrum cannot be left to NCLT and NCLAT. This has to be taken to a logical conclusion. The operational creditor will be getting zero,” says Justice Arun Mishra

“What is the amount involved? We have not been told everything clearly. We must know everything in black and white,” says Justice Arun Mishra

“We are examining from AGR dues’ point of view,” Justice Mishra said to Harish Salve who wanted to intervene on behalf of State Bank of India (SBI).

“We are examining from AGR dues’ point of view,” Justice Mishra said to Harish Salve who wanted to intervene on behalf of State Bank of India (SBI).

“I have a partial answer. Part of spectrum lying idle with me. I have an asset sharing contractual arrangement with Reliance Jio and that has been reported to DoT. The fee has been paid to DoT on this,” said Shyam Divan.

“It seems it is being used by Reliance Jio. But tell us since when it is using it and in what capacity?,” Supreme Court asked Shyam Divan.

Justice Arun Mishra asked ‘Why Reliance Jio sale fell through? Who is using this RCom spectrum? We are interested to know this. Who is using since when?”

Shyam Divan, RCom’s resolution professional, takes through the contempt proceedings against Anil Ambani and other directors.

Shyam Divan informed the court that RCom-RJio deal didn’t fructify. This was because the prospective buyer refused to give the undertaking to pay RCom debts.

Shyam Divan, RCom’s resolution professional, is giving background of Ericsson case to the bench.

Shyam Divan told the Supreme Court that on February 1, 2019, directors and shareholders of corporate debtor filed for withdrawal of appeal from NCLAT

In July 2018, corporate debtors had filed for closure of CIRP (Corporate Insolvency Resolution Proceeding) as settlement had arrived. SC on August 3, had accepted the settlement, saying timeline should be strictly complied with. Payment to be made by Sep 30, says Shyam Divan.

Shyam Divan, RCom’s resolution professional said that Ericsson had agreed to settle the matter for Rs 550 crore in 120 days. NCLAT had restored the erstwhile management and gave the liberty to sell assets and deposit the money with the joint lenders forum.

Shyam Divan said that SBI was also present during the hearing in NCLAT. On May 30, 2018, Reliance companies had challenged NCLT order admitting insolvency petition. Other creditors including joint lenders forum and operational creditors had also appeared in NCLAT.

RCom’s resolution professional said that Ericsson has filed application under Section 9 for insolvency. 

Shyam Divan gave a timeline for Ericsson and China Development cases in NCLT. 

Senior counsel Harish Salve and Ranjit Kumar appeared for State Bank of India (SBI). Shyam Divan appeared as Reliance Communication’s (RCom) resolution professional

The Supreme Court began hearing on adjusted gross revenue (AGR) dues of telecom companies such as Bharti Airtel and Vodafone Idea. 

Bharti Airtel shares were still trading over 1.5 per cent down at Rs 527.15 apiece, as compared to a 1.25 per cent fall in the benchmark S&P BSE Sensex in late afternoon deals.

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Vodafone Idea’s net operating revenues slipped 9.3% on-quarter basis and 5.4% on-year basis to 10,659 crore. Average Revenue Per User (ARPU) has also been falling for Vodafone Idea, now at Rs 114 against Rs 121 in the previous quarter. Kotak Institutional Equities in a report said that the numbers were hit by the coronavirus which affected customers and a weakening subscriber mix for the telco.

Motilal Oswal Financial Services in its July report said for a 20-year timeframe, Vodafone Idea would require to pay Rs 5,100 crore. Owing to the high leverage and huge cash requirements, the brokerage firm sees a bleak future for Vodafone Idea.

Research and brokerage firm Motilal Oswal Financial Services estimated that Vodafone Idea may have to pay Rs 6,000 crore per year if the court grants a 15-year timeframe. “Considering dues at 8% interest rate VIL would require to pay an annual amount of Rs 5,900 crore if the SC grants a time frame of 15 years,” the brokerage firm said.

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Bharti Airtel has paid Rs 18,004 crore out of total dues of Rs 43,000 and Vodafone Idea paid Rs 7,854 crore out of its total AGR dues of around Rs 58,000 crore, so far.