Shares of Vodafone Idea recently dropped by more than 23% in India after the Supreme Court of the country ordered Vodafone Idea and Airtel, two telecom giants in the country, to arrange and clear off their dues worth billions of dollars.
The court’s order may also have large repercussions as both their local joint ventures may fail as a result. The telecom giant had more than 336 million subscribers in November last year.
The judgment arrived after the Supreme Court rejected the telecom network’s application to postpone the payment of $13 billion levies to the government. On the court’s order, Justice Arun Mishra told lawyers: “This is pure contempt, 100% contempt.”
Back in October, the Supreme Court had ordered the two telecom companies Vodafone India and Airtel to pay within 90 days a combined $13 billion to the government in adjusted gross revenue as spectrum usage charges and license fees.
Vodafone Idea, which is already burdened with a net debt worth $14 billion, owes about $4 billion in levies to the Indian government.
Vodafone Idea Chairman, Kumar Mangalam Birla said in December that the company is likely to shut down soon in the absence of any relief from the government. He said: “It doesn’t make sense to put good money after bad.”
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