After 2G verdict, Videocon slaps ~10,000-crore bill

First company to decide to move TDSAT; others may follow suit

Videocon Telecommunications, which lost its nationwide telecom licence in February 2012 following a Supreme Court (SC) order, will claim ~10,000 crore as compensation from the government.

Armed with Thursday’s judgment of the Central Bureau of Investigation (CBI) court, which gives a clean chit to former Telecom Minister A Raja and others, Videocon will approach the Telecom Disputes Settlement and Appellate Tribunal to strengthen its claim, which it first made in 2015.

“The judgment has strengthened our case as we suffered for no fault of ours,” said a Videocon executive.

The compensation demand includes ~5,449 crore for expenditure towards capital and operating expenditure, interest and finance charges, pre-operative expenses, advances to associated entities and network operating centre costs.

Lawyers said other companies, too, were considering filing such claims.

Videocon will emphasise portions of the CBI court verdict that criticise the lack of clarity in the policy for grant of telecom licences. In its 2012 order, the SC had made it clear that Videocon had neither benefited from the first-come, first-served policy nor was involved in any manipulation to obtain telecom licences or spectrum.

The CBI had informed the SC in 2011 that no evidence was found against Videocon regarding any wrongdoing. As a result, the apex court did not impose any cost or penalty upon Videocon in its judgment on February 2, 2012.

From the time of receiving its licence and spectrum in 2008, Videocon spent ~9,353 crore to set up its network and roll out services. The company had cornered a sizeable share in tier-II markets.

The SC judgment led to the closure of its business and lay-offs. In November 2012, the company won spectrum in auctions for six telecom circles.

In May 2016, Videocon sold its spectrum to Bharti Airtel for ~4,428 crore and exited the telecom business. The cancellation of its telecom licences also affected Videocon’s core business as loans to the telecom arm were backed by the parent company.

Lawyers said the CBI court verdict would provide ammunition to affected companies to reassert their claims.

“However, the CBI court’s verdict is subject to challenge in the high court. The real picture is yet to unfold,” said Harsh Walia, associate partner, Khaitan & Co.

The CBI court trial was to determine whether there was any criminality involved in the grant of telecom licences. “The licences were cancelled by the SC, which held the policy was flawed.

Now that it has been held that there was no criminality involved in the decision-making process, the conclusion is that the licences were awarded on the basis of a flawed policy of the government and the companies that had invested based on the policy have lost their investments for no fault of theirs,” said Monish Panda, founder of law firm Monish Panda & Associates.