SC makes CEOs liable if telecom companies fail to pay AGR dues

CEO asked to furnish personal guarantee within four weeks; order alarms professional managers

Passengers standing in a local train | Photo: Bloomberg

A passenger standing in a Mumbai local train use his cellphone. | Photo: Bloomberg

Dev Chatterjee Mumbai
The Supreme Court (SC) on Tuesday made it incumbent on managing directors/chairmen or any authorised officers of telecom companies to furnish an undertaking to make payment of AGR arrears within four weeks.

If the companies fail to pay the dues then it would lead to penalty, interest and contempt of court, said a bench led by Arun Mishra. The order didn’t say if promoters and boards of companies will be held liable.

“The CEOs usually take instructions from the board and from the promoter--especially about such big-ticket payments. By making them responsible, it has increased risk for the CEOs,” said a Mumbai-based lawyer.

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First Published: Sep 01 2020 | 6:00 PM IST

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