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Saturday, 25 January 2020 00:00
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Sebi never asked PSUs why they didn’t disclose AGR case


The owners and top management of private sector telecom companies have been running helter-skelter trying to find ways to deal with the aftermath of the Supreme Court’s (SC) AGR judgment; apart from filing petitions in the SC, Bharti Airtel, for instance, raised money to ensure that, if the SC didn’t provide any relief, it would be able to make the payment. Yet, the one group of firms that was actually hit far harder than the private sector telcos was that of several PSUs who, while they ran disparate businesses, had taken on telecom licences for provision of internet services. Gail, for instance, has to pay over Rs 183,000 crore on the Rs 35-40 crore that it earned as revenue—not profit—from these services. The demand, based on the ruling that said even non-telecom revenues were to be added to the AGR, was patently absurd; but Gail’s top management didn’t show the same kind of panic that the private telcos did. As for Gail’s owners, the Government of India, it was a lot more relaxed; no group of ministers were set up on this, nor was any reference made to the attorney general or the solicitor general to come up with a solution.

Worse, while all listed firms are obligated, by law, to inform the stock exchanges of any news that could have a material impact on the share prices, PSUs like Gail didn’t bother to do so even though, were the SC not to grant it any relief, the company would not be able to make the payment. On October 24, the day of the SC ruling, both Vodafone Idea, and Bharti Airtel put out a statement on the stock exchanges on how the judgment would have damaging implications. And, the day after, Vodafone Idea, in fact, even put out an interim estimate of the financial liability. On January 16, the telco informed the exchanges its review petition had been dismissed, and that it was looking at filing a curative petition. Through all this, even as newspapers were giving details of the huge hits PSUs would take, neither the ministries in charge of the PSUs nor the PSUs put out any statement or wrote to the stock exchanges. It was only on Thursday that Gail informed the exchanges that its due could cross Rs 183,000 crore.

Amazingly, the market regulator Sebi never thought it worth its while to ask Gail and other listed PSUs for an explanation for a ruling which would hurt them badly. This, though, is not the first time Sebi has favoured PSUs by setting different standards for them. When listed firms were told to ensure they had a 25% public float by 2013, PSUs needed just a 10% float. When the PSU float was also raised to 25% and they kept missing the deadline, Sebi kept giving them more time; the last extension will expire later this year. And, though it clearly affected competition, the Competition Commission of India didn’t even protest when the government handed Air India `33,000 crore; had Air India shut down, air fares would have risen and airlines like Jet Airways may not have shut down.


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