Will the Supreme Court quashing telecom licences affect FDI in India | LinkedIn Answers | LinkedIn
Will the Supreme Court quashing telecom licences affect FDI in India | LinkedIn Answers | LinkedIn
Will the Supreme Court quashing telecom licences affect FDI in India
The Supreme Court has declared that the122 telecom licenses granted in 2008 were illegal and have to be cancelled.
International players like Telenor have got hit by the ruling. The government says that it welcomes the court decision and the resulting policy clarity that this brings...if anyone has been aggrieved they can go back to the court for compensation. However the courts would never compensate anyone for lost opportunities...
The fact is that the licenses were given away cheap and profits were made by those who sold the licenses to investors like Telenor. By cancelling the licenses, the beneficiaries retain their ill gotten profits and good faith investors like Telenor lose the licenses....
Natural justice would suggest that those who were wrongly benefited should regurgitate the money and pure good faith investors should be adequately compensated for their investment and efforts...but apparently there is no way to make it work that way...
International players like Telenor have got hit by the ruling. The government says that it welcomes the court decision and the resulting policy clarity that this brings...if anyone has been aggrieved they can go back to the court for compensation. However the courts would never compensate anyone for lost opportunities...
The fact is that the licenses were given away cheap and profits were made by those who sold the licenses to investors like Telenor. By cancelling the licenses, the beneficiaries retain their ill gotten profits and good faith investors like Telenor lose the licenses....
Natural justice would suggest that those who were wrongly benefited should regurgitate the money and pure good faith investors should be adequately compensated for their investment and efforts...but apparently there is no way to make it work that way...
Clarification added 2 months ago:
The broader issue here is that an organization has many stakeholders...not just the shareholders...there are the customers, suppliers, employees and the proximate society...when the courts discontinue a company's operations, they are punishing the other stakeholders for the crimes of the shareholders who are in management...an example is a hospital or education college....if the management of a college does something illegal closing the college hurts the students more than anyone else...
In the telecom case, the best way would be to confiscate the share of those shareholders who were in management at the time the crime was committed and auction these shares to the highest bidder with proceeds of the auction going to the public exchequer....but let the company business continue...this way the government would recoup a significant part of the loss from giving away spectrum cheap and good faith investors who came to the scene later would not lose out entirely...
In the telecom case, the best way would be to confiscate the share of those shareholders who were in management at the time the crime was committed and auction these shares to the highest bidder with proceeds of the auction going to the public exchequer....but let the company business continue...this way the government would recoup a significant part of the loss from giving away spectrum cheap and good faith investors who came to the scene later would not lose out entirely...
posted by Unknown at 1:18 AM
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