Kumar Mangalam Birla steps aside from Vodafone Idea board
09 Aug 2021
Aditya Birla Group chairman and promoter of Vodafone Idea Ltd (VIL) Kumar Mangalam Birla, has stepped aside from the company’s board of directors two days after he told the government that he cannot run the company with Rs1,80,000-crore debt burden.
Vodafone Idea has to pay dues of over Rs58,000 crore to the telecom department that are linked to adjusted gross revenues dating back to 2007.
The company had moved the Supreme Court seeking directions to government to reassess the dues but the apex court recently turned down the petitions from Vodafone Idea and Bharti Airtel for a recomputation of the dues.
Meanwhile, Vodafone Idea had reported a consolidated net loss of Rs7,023 crore during the quarter ended 31 March 2021, which was, however, lower than the loss of Rs11,643.5 crore in the year-ago quarter.
On Monday Kumar Birla made a public statement that he is willing to hand over his stake in the ailing telecom company to any state-owned or "domestic financial entity" in order to ease the financial stress and keep the telecom company afloat.
Birla had, in June written a letter to cabinet secretary Rajiv Gauba, in which he had offered to transfer his 27.6 per cent stake in the debt-laden telecom company ‘‘to any public sector/government/domestic financial entity or any other the government may consider worthy to keep the company going”.
He had made it clear that Vodafone Idea is staring at an uncertain future unless the government puts together a viable bailout plan for the telecom sector.
On Wednesday, the company said in a filing with the stock exchanges: ‘‘The board of directors of Vodafone Idea, at its meeting held today, have accepted the request of Mr Kumar Mangalam Birla to step down as non-executive director and non-executive chairman of the board with effect from the close of business hours on August 4.’’
The company said Himanshu Kampania, currently the non-executive director, would take over as the non-executive chairman of the company. Kampania is a nominee of the Aditya Birla group.
The board also appointed Sushil Agarwal, another nominee of the Aditya Birla group, as an additional director with immediate effect.
While the announcement came after market hours, the Vodafone Idea stock had already plunged 18.5 per cent to close at Rs6.03 on the BSE as investors scrambled to sell their shares.
Vodafone Plc, which acquired a 67 per cent stake in the original telecom entity from Hong Kong-based Hutchison Whampoa in April 2007, currently holds about 44 per cent in Vodafone Idea.
Vodafone Idea was created out of a merger between Vodafone India and Birla-owned Idea Cellular in August 2018.