Videocon: PM Modi, SC, Brazil responsible for Rs. 39,000cr debt
Videocon Industries Ltd., with its massive Rs 39,000cr debt, is facing bankruptcy proceedings after the National Company Law Tribunal (NCLT) admitted a plea from lenders last week, led by the State Bank of India. The proceedings are to be completed within 180 days. However, Videocon has filed an appeal to wrest back control, and has blamed PM Modi, the Supreme Court for its misfortunes.
Pointing a finger at PM Modi, the Indian consumer electronics maker said that Modi's decision to demonetize high-value currency notes in November 2016 adversely affected its business. The lack of cash, following the demonetization, choked supplies for making cathode ray tube (CRT) televisions, and consequently, Videocon was forced to shut down the business, said the company in its filing.
Videocon also blamed the country's apex court for its woes. In February 2012, the Supreme Court cancelled 21 telecom licenses belonging to Videocon, in connection to th 2G scam. Videocon, which has maintained innocence in the scam, subsequently lodged a Rs. 10,000cr case against the government as compensation for business losses resulting out of the Supreme Court's decision.
Videocon has also pointed fingers overseas, blaming bureaucracy and red tape in the Brazilian government for its debt woes. The company's oil-and-gas business in Brazil collapsed after the company failed to get approvals from the Brazilian government to start an equal venture with the South American country's Brazil Petroleum Limited. Over the last five years, Videocon's shares have plunged a whopping 96%.