By P R Sanjai and Ashutosh Joshi
Who’s at fault for Videocon Industries Ltd.’s 39 billion rupees ($579 million) debt pile? The Indian maker of consumer appliances is casting the blame on Prime Minister Narendra Modi’s decision to ban cash, the nation’s top court and the Brazilian government.
A bankruptcy court admitted an insolvency petition filed by creditors, led by State Bank of India against Videocon, and ordered debt reorganizers to take over its management. That prompted the company to file an appeal to wrest back control, according to an exchange filing on Tuesday.
Modi’s clampdown on cash in November 2016 chocked supplies for making cathode ray tube televisions and forced it to shut the business, Videocon said in the filing. While its oil-and-gas business got entangled in red tape in Brazil, the telecommunications venture suffered losses after India’s Supreme Court canceled licenses.
The company’s shares, which have plunged a whopping 96 percent over the past five years, traded at 7.65 rupees at 12:26 p.m. in Mumbai.
Videocon’s energy business failed to get approvals from the Brazilian government to start its equal venture with Brazil Petroleum Ltd.. In India, the company lost a revenue source when the top court in February 2012 canceled 156 licenses of various telecom operators, according to the filing.
P R Sanjai and Ashutosh Joshi are authors at Bloomberg Quint.