US firm Hughes fears closure over unpaid fees, banking services across India could be hit


Economics Times
February 24,2020

US satellite broadband provider Hughes Network Systems may have to shut its Indian operations due to unpaid levies owed to the government, which could put thousands of banking services at risk, a company letter
seen by Reuters showed. 

The Supreme Court late last year ordered a number of telecom companies, including Hughes and larger firms like Vodafone, to pay billions of dollars owed to the government.

Hughes' India unit provides services to defence, education and banking sectors in the country and told the telecom ministry in a letter dated February 20 that it faces bankruptcy as it can't pay the Rs 600 crore ($84 million) it owes.
The closure of the company could disrupt connectivity at more than 70,000 banking locations and many critical satellite networks in the Indian navy, army and railways, Hughes' India President Partho Banerjee said in the letter, which was seen by Reuters.
"We are facing a huge demand ... which by no means is serviceable by us and is in fact pushing our company towards bankruptcy & closure," Banerjee wrote in the letter.
"This is an SOS request," he added. The company says the government's telecoms department had made an incorrect calculation of the dues more than a decade ago which has ballooned to $84 million with interest and penalties.
Hughes, when approached by Reuters for comment, would not comment on the substance of the letter but said in a statement it "remains committed to India" and would continue to provide services to its customers.
India's telecoms ministry did not respond to a request for comment.
Vodafone Idea, which owes $3.9 billion in dues, interest and penalties, has already warned of a potential exit, putting at risk 13,000 employees and billions of dollars in bank loans.

India's claim for unpaid dues followed a dispute with companies over how adjusted gross revenue, a percentage of which companies need to pay to the government as fee, was calculated.

While the $84 million Hughes owes is significantly smaller than the sums owed by larger peers, a company document from December showed it was still more than three times its net worth in India.

"This, if not resolved, will make the operation unviable thus rendering many customers like banks, other enterprises and critical government networks without any connectivity," the company said in a separate December letter to the government.

Hughes, which is part of U.S.-based satellite group Echostar Corp, said in December 2018 it had been chosen to provide high-performance satellite broadband system for India's naval communications network.

The company also provides communication services to more than 30 public and private banks in India, according to its website.


Reference:https://economictimes.indiatimes.com/industry/banking/finance/banking/us-firm-hughes-fears-closure-over-unpaid-fees-banking-services-across-india-could-be-hit/articleshow/74278045.cms

Comments

Post a Comment

Popular posts from this blog

India Joins Russia in Voting Against West-Backed Move to Expand Powers of OPCW

The Wire: June 28, 2018 New Delhi: India voted against a UK-backed move that will allow the global chemical weapons watchdog to apportion blame for illegal attacks, criticising the decision to grant “unchecked powers” to the head of the group which could be used for “partisan” purposes. On Wednesday, more than two-thirds of the member states of the Organisation for the Prohibition of Chemical Weapons (OPCW) voted to authorise the international body to identify the perpetrators and sponsors of a chemical weapons attack. It also specifically called on the OPCW’s technical secretariat to begin work on identifying the perpetrators behind the use of chemical weapons in Syria. The draft decision, sponsored by 30 countries, was adopted at the fourth special session of the conference of the states parties to the Chemical Weapons Convention at the Hague, with 82 in favour and 24 negative votes. While Europe, the United States and their allies voted ‘yes’, there was strong oppo...
Read more

ED tracks Swiss Bank A/Cs of Agusta scamster

The Poineer February 10,2019 Rakesh K Singh The Enforcement Directorate (ED) has tracked a dozen Swiss bank accounts in the name of Rajiv Saxena, who is key accused in the Rs 3,600 crore AgustaWestland VVIP chopper scam. The ED has also found out accounts held by  his family members and associates where the kickbacks in the now scrapped deal were allegedly parked. Two bank accounts are in the name of Rajiv Saxena’s  associates Pankaj Jain and Sumita Jain who are also the authorised signatories. The  third is in the name of another associate Ajit Singh Bubber, but Rajiv and his family members are authorised signatories. The remaining nine accounts are largely owned and operated by Rajiv, his family members and associates. Rajiv Saxena was deported by the UAE authorities on January 30 and the ED formally arrested him the next day and a court later granted his remand to the agency. He is currently undergoing custodial interrogation by the ED. The agency had in 2017...
Read more

As financial insecurity rises in urban India, so does investment in insurance

Image
Scroll.in March 13, 2020 Urban Indians are becoming less confident about their financial security. Up to 58% of them fret over financial independence post retirement, which is a 4% increase from last year. An equal share of urban Indians worry about meeting their daily medical expenses and sustaining their current lifestyle once they stop working. The findings are part of a survey published by Delhi-based Max Life Insurance in association with London-based consultancy Kantar. The firms surveyed 7,014 respondents in 25 cities, including six metros, nine tier-1 cities, and 10 tier-2 cities, between December 2019 and January 2020. Source: Max Life Insurance via Quartz The trends Source: Max Life Insurance via Quartz Source: Max Life Insurance via Quartz Source: Max Life Insurance via Quartz A significant share of urban Indians also say their families will have no financial support in the event of the breadwinner’s death. In such a scenario, around 57% believe the family sav...
Read more