Senior Supreme Court counsel Harish Salve explains to CNBC-TV18 that it is the end of the judicial road for Videocon and that the court is set to hear the criminal cases on February 25 or 25
The Supreme Court has upheld the 2G cancellation order issued on February 2 and therefore dismissed the curative petition by Videocon. Senior Supreme Court counsel Harish Salve explains to CNBC-TV18 that it is the end of the judicial road for Videocon and that the court is set to hear the criminal cases on February 25 or 25.
Below is the edited transcript of the interview on CNBC-TV18
Q: The order on the curative petitions filed by Tata Tele and Shyam Sistema are still pending. However, the Supreme Court has decided in the case of Videocon and dismissing the curative petition. Is this really the end for Videocon 's 2G foray?
A: I suppose as far as Videocon is concerned, it is the end of the road as far as judicial remedies are concerned.
Q: In the light of the Supreme Court’s cancellation of Videocon’s 2G order, have the chances become limited for other companies such as Tata Tele or Shyam Sistema?
A: It is very difficult to hazard a guess.
Q: You represent Tata Tele and Shyam Sistema. Do you have any information on why these cases were not taken up for hearing today?
A: Nobody has that information because a curative in the first stages is done strictly indoors. It is done by the Supreme Court in chambers and whether the papers were circulated or not and if the court didn’t take then up, are all matters which are not in that sense in the public domain. So, we have to wait and watch.
Q: How different or similar is Tata Tele or Shyam Sistema’s case as compared to Videocon's?
A: I have personal knowledge of Tata Tele and Shyam Sistema petitions and only have a vague idea about the Videocon petition. There is a significant difference because Tata Tele’s curative petition is confined to the imposition of the Rs 5 crore penalty on grounds that it has been mistakenly equated with companies like Telenor which raised money purely on the basis of a licence. The Tata Docomo deal was not based on the three new licences granted and was inked much before the grant of the licences.
Ultimately, only three licences of Tata’s were cancelled by the judgment and those licences are limited to far-flung areas and the licences really had no commercial value. The real issue is that Tata and Reliance are locked in a battle about dual technology- the switchover from CDMA to GSM.
Q: The Supreme Court is maintaining a close watch on the 2G case even after the cancellation of licences. Do you expect the possible collusion between Unitech accused Sanjay Chandra and an official of the CBI to have any impact on the course of the 2G case in the Supreme Court?
A: All the 2G cases are completely different and the Supreme Court is monitoring four or five cases. One is Tata’s curative and Sistema Shyam has challenged on grounds that it was in the race for CDMA and has been wrongly equated with the GSM.
The question of giving Sistema Shyam spectrum on the basis of new prices is again something that the court is monitoring and that’s a big issue, because all the new auctions seem to be in some difficulty. So that’s the second issue the court is monitoring.
Then the court is also hearing applications on whether the 900Mhz should have been offered for auction. Regarding the criminal cases, the court is very concerned and has set the hearing for February 25 or 26.
Q: Shyam Sistema’s curative petition has also been dismissed. As the legal counsel for the company, what is the road ahead?
A: I don’t know. The company has to decide on whether it wants to stay in India, bid for the auction under the revised terms or initiate international arbitration.
Q: Has international arbitration as a possibility been discussed?
A: Some initiatives in that direction have been taken but while the curative was pending it was hoped that a positive decision would allow them to remain in India. If the prices were sensible, the company may have participated in the auction but it appears that the prices are very high.
So, I don’t know whether it will be commercially viable to continue to operate in India at the revised price or wrapping up and going. Though it sounds well initiate BIT (Bilateral Investment Treaty) arbitration, the company’s first choice was to do business in India.
Videocon Ind stock price
On October 13, 2015, Videocon Industries closed at Rs 138.55, up Rs 2.05, or 1.50 percent. The 52-week high of the share was Rs 199.80 and the 52-week low was Rs 115.00.
The company's trailing 12-month (TTM) EPS was at Rs 1.23 per share as per the quarter ended June 2015. The stock's price-to-earnings (P/E) ratio was 112.64. The latest book value of the company is Rs 309.83 per share. At current value, the price-to-book value of the company is 0.45.
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