Maxis case: RCom-Aircel deal gets a breather

| Updated on: Jan 12, 2018

Aircel has been facing troubled times in a highly financially stressed industry

Supreme Court to take up case against TA Krishnan today

The special 2G court’s decision to quash all charges against TA Krishnan of Maxis Group comes as big relief for the ongoing merger talks between Aircel and Reliance Communications.

Maxis owns majority shares in Aircel and any legal action against Krishnan could have derailed the merger process. But eyes are now on the Supreme Court which is taking up the case against Krishnan on Friday. The apex court has threatened to cancel Aircel’s 2G spectrum allocation if Krishnan does not produce himself in the court.

The Court of OP Saini, Special Court (2G spectrum case), discharged all the accused in the Aircel-Maxis Case. The CBI had filed a chargesheet before the 2G Court in August 2014 against former Telecom Minister Dayanidhi Maran, his brother Kalanithi Maran, Maxis Communications Bhd, Astro All Asia Networks Ltd, Sun Direct TV Pvt. Ltd., South Asia Entertainment Holdings Ltd, T.A. Krishnan and Ralph Marshall. The case emanated from a case registered by the CBI in 2011 and was monitored by the Supreme Court as part of the 2G scam cases.

The CBI had alleged that Dayanidhi Maran, the then Minister of Communications and Information Technology in abuse of his official position, deliberately delayed grant of licences in 7 telecom circles and other approvals on various issues pending before Department of Telecommunications related to Aircel, when it was owned by Chennai-based businessman C. Sivasankaran. The delays were on frivolous grounds with an intent to force its exit from the telecom business by constricting the business environment.

The sale of these companies held by Sivasankaran to Maxis, a Malaysian company was with the intervention of Dayanidhi Maran and his brother Kalanithi Maran. It was alleged that for these favours and as a quid pro quo, an illegal gratification was paid by Astro by acquiring shares to Sun Direct at a premium of ₹69.57 per share for ₹549 crore.

The merger deal was announced in September 2016 under which RCom and Aircel’s Malaysia-based promoters Maxis Communications Berhad will hold 50 per cent each in a newly created venture, with equal representation on the board. This would have created the country’s third-largest mobile operator by subscriber base enabling both RCom and Aircel to stay relevant in a highly competitive telecom market dominated by bigger players such as Reliance Jio and Airtel.

The apex court on Friday will hear a petition from banks that have loaned money to Aircel. Aircel itself has asked to be made party to the case. According to legal experts, with the 2G court quashing the main case, the apex court is likely to take cognisance of the new development and give a ruling on the issue.

Published on February 02, 2017
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