Kumar Mangalam Birla steps down as non-executive chairman of Vodafone Idea

Vodafone Idea on Wednesday said its board accepted the request of Aditya Birla group Chairman Kumar Mangalam Birla to step down as non-executive director and non-executive chairman of the Board.

Himanshu Kapania, currently a non-executive director, has been appointed as non-executive chairman.

"The Board of Directors of Vodafone Idea Limited, 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 close of business hours on 4th August, 2021," the telco said in a stock exchange filing.

Kapania, a nominee of the Aditya Birla Group, is a telecom industry veteran with 25 years of experience. He has also served on the Global GSMA Board for two years and was also the Chairman of the Cellular Operators Association of India (COAI) for two years. He is presently the Chairman of the FICCI Council on Telecom, Electronics and Digital Economy.

Further, the Board has appointed Sushil Agarwal, a nominee of Aditya Birla Group, as an Additional Director (Non –

Executive and Non Independent) with effect from August 4, 2021. 

Earlier this week, Birla had offered to hand over his stake in debt-laden Vodafone Idea Ltd (VIL) to the government or any other entity that the government may consider worthy to keep the company operational.

The billionaire businessman made the offer in June in a letter to Cabinet Secretary Rajiv Gauba.

According to official data, VIL had an adjusted gross revenue (AGR) liability of Rs 58,254 crore out of which the company has paid Rs 7,854.37 crore and Rs 50,399.63 crore is outstanding.

VIL alongwith Bharti Airtel had approached the Supreme Court for correction in the government calculations but their plea was rejected.

In the letter, Birla, who holds around 27 per cent stake in VIL, said investors are not willing to invest in the company in the absence of clarity on AGR liability, adequate moratorium on spectrum payments and most importantly floor pricing regime above the cost of service.

Without immediate active support from the government on the three issues by July, the financial situation of VIL will come to an "irretrievable point of collapse", Birla said in the letter dated June 7.

"It is with a sense of duty towards the 27 crore 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," Birla said in the letter.

Shares of Vodafone Idea slipped 18.5 per cent at Rs 6.03, hitting a fresh 52-week low on the BSE in the intra-day trade on Wednesday, after reports suggested that Vodafone Group Plc has ruled out any further equity infusion in its debt-ridden telecom joint venture in India.

With today's fall, the stock of the telecom services provider has tanked 26 per cent in two days after reports emerged of Birla telling the government that he is willing to give up promoter stake in the company.

The stock was trading at the lowest level since June 2020. It had hit a record low of Rs 2.61 in November 2019.