Idea gets Rs 600-crore fine notice over Spice merger
4 Dec 2013 12:08 AM GMT
The DoT, however, said the merger of the operational Spice licences of Punjab and Karnataka can be taken on record if Idea pays up the penalty of Rs 600 crore within next 15 days, Idea Cellular said in a filing to the Bombay Stock Exchange (BSE).
The company is preparing to take necessary steps to challenge the DoT letter at appropriate forum, it said. 'Idea Cellular Limited has received a communication from DoT, Ministry of Communications & IT, on imposition of financial penalty of sum of Rs 600 crore for alleged violation of terms and conditions of CMTS /UAS licences while acquiring erstwhile Spice Communications Limited,' the filing said.
As per the rules, a telecom operator cannot hold more than 10 per cent stake in another operator in the same circle.
Spice Communications was amalgamated with Idea effective 1 March, 2010, after approval of merger by the Gujarat High Court on 26 November, 2009, and the Delhi High Court on 5 February, 2010, the filing said.
It added the Delhi High Court passed an order on 13 July, 2012, asking DoT to give its final decision on transfer of operational Spice licences of Punjab and Karnataka in the name of Idea.
‘...the DoT has written that the Department is prepared to take the merger of companies...on record and change the name of two Spice UAS licences of Punjab and Karnataka service areas subject to Idea paying financial penalty of Rs 600 crore besides other list of compliances within next 15 days,' the filing said. The DoT letter is dated 29 November, 2013, it added.
In 2008, Idea Cellular acquired 41.09 per cent stake in Spice Communications. The companies merged in 2010, which resulted in overlapping of licences in six circles.
At the time of the merger, both the companies had licences for Andhra Pradesh, Delhi, Haryana, Maharashtra, Punjab and Karnataka.
Meanwhile, the Supreme Court in its February 2012 order cancelled Idea Cellular's licences for Punjab and Karnataka circles, while Spice lost its licences for Andhra Pradesh, Delhi, Haryana and Maharashtra.
As a result, only Punjab and Karnataka licences are operational post the merger.
The company is preparing to take necessary steps to challenge the DoT letter at appropriate forum, it said. 'Idea Cellular Limited has received a communication from DoT, Ministry of Communications & IT, on imposition of financial penalty of sum of Rs 600 crore for alleged violation of terms and conditions of CMTS /UAS licences while acquiring erstwhile Spice Communications Limited,' the filing said.
As per the rules, a telecom operator cannot hold more than 10 per cent stake in another operator in the same circle.
Spice Communications was amalgamated with Idea effective 1 March, 2010, after approval of merger by the Gujarat High Court on 26 November, 2009, and the Delhi High Court on 5 February, 2010, the filing said.
It added the Delhi High Court passed an order on 13 July, 2012, asking DoT to give its final decision on transfer of operational Spice licences of Punjab and Karnataka in the name of Idea.
‘...the DoT has written that the Department is prepared to take the merger of companies...on record and change the name of two Spice UAS licences of Punjab and Karnataka service areas subject to Idea paying financial penalty of Rs 600 crore besides other list of compliances within next 15 days,' the filing said. The DoT letter is dated 29 November, 2013, it added.
In 2008, Idea Cellular acquired 41.09 per cent stake in Spice Communications. The companies merged in 2010, which resulted in overlapping of licences in six circles.
At the time of the merger, both the companies had licences for Andhra Pradesh, Delhi, Haryana, Maharashtra, Punjab and Karnataka.
Meanwhile, the Supreme Court in its February 2012 order cancelled Idea Cellular's licences for Punjab and Karnataka circles, while Spice lost its licences for Andhra Pradesh, Delhi, Haryana and Maharashtra.
As a result, only Punjab and Karnataka licences are operational post the merger.
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