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SC tells Vodafone to pay Rs 2,000 crore to approve merger of four firms

vodafone

The Supreme Court of India has directed telecom operator Vodafone to pay Rs 2,000 crore to the government to approve the merger of its four firms, reports Business Standard. The report added that the court ordered the department of telecommunications to approve the merger of four firms with Vodafone Mobile Services, a subsidiary of Vodafone India.

The government appealed against an interim order of the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) on spectrum usage charge and other issues, including the merger of Vodafone-related firms. The TDSAT said that no amount was payable till the disputes between the government and Vodafone were resolved. The government moved the Supreme Court contending that Vodafone had not followed the guidelines for merger and that the deal could not be approved till dues were cleared.

The government further contended that Vodafone Mobile owed Rs 6,678 crore while Vodafone disputed the amount and agreed to pay Rs 1,773 crore. The Supreme Court made it a round figure of Rs 2,000 crore. The court order added that if Vodafone succeeded in its petitions before the TDSAT, the government should refund the amount to the company with interest determined by the tribunal.

Conditional approval

Vodafone had got a conditional approval for merger of various entities from DoT on December 8, 2014, subject to certain payments. However, the British telecom major represented that such amounts were not payable to DoT. The DoT thereafter issued revised letter on May 6, 2015 seeking certain undertakings instead of payments for AGR (adjusted gross revenue) and spectrum usage charges.

Vodafone’s arguments

Vodafone’s attorney KK Venugopal said argued before the court saying that the merger was mainly an internal restructuring of the telecom companies related to each other and there was no transfer of spectrum from one area to another. And hence did not need to pay the government.

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