Vodafone Idea ltd said that the board of directors of the company has accepted the request of Kumar Mangalam Birla to step down.
In a notification to the exchanges, Vi (formerly known as Vodafone-Idea) said that the board of directors of the company has accepted the request of Kumar Mangalam Birla to step down as non-executive director and non-executive chairman of the board with effect from Wednesday.
Mr Birla will be replaced by Himanshu Kapania, currently a non-executive director on the board of Vi. Kapania is a nominee of the Aditya Birla group on the Vi board.
Mr Birla’s decision to step down has come just days after his letter written to Cabinet Secretary in June went public.
In his letter, Mr Birla had expressed willingness to offer his group’s 27 per cent stake in Vodafone Idea Limited (VIL) to any government or domestic financial entity in order to keep the stressed telecom company alive.
Birla made the suggestion to give up the control of his company more than a month before the Supreme Court dismissed the company’s application for recalculation of the AGR dues, which highlighted that there is a need for urgent measures from the government.
In his letter, Birla had said, “It is with a sense of duty towards 27 crore (270 million) Indians connected by VIL, I am more than willing to hand over my stake in the company to any entity-public sector/government/domestic financial entity or any other that the government may consider worthy of keeping the company as a going concern.”
However, just a day after this letter was made public, Vi lost over Rs 2,700 crore in market cap. The company has been struggling to clear AGR dues of more than Rs 50,000 crore.
VIL owes Rs 50,399.63 crore in AGR; it has already paid Rs 7,854.37 crore. After Tuesday’s crash remaining dues are more than double the existing market cap of Rs 21,264 crore, NDTV reported. Further, as of March 31, 2021, gross debt, excluding lease liabilities and AGR dues, is Rs 1,80,310 crore. This includes Rs 96,270 crore in deferred spectrum payment obligations and Rs 23,080 crore in debt to banks and financial institutions, the report added.
The VIL, the government or any other concerned party have not made any immediate comment on the letter leak. It is also unclear if there was communication between the government and VIL following the submission of this letter.
However, after the letter with warning of “immediate” danger went public, VIL stocks tanked on Tuesday, crashing 12 per cent to a 52-week low before recovering slightly.
Mr Birla, in 2019, had warned that Vodafone would be forced to shut down if the government did not provide relief on AGR and other liabilities. “If we we are not getting anything I think it is end of story for Vodafone Idea,” he had said.
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