Comments
Difficult times still continue to dog Reliance Communications (RCom), with the National Company Law Appellate Tribunal (NCLAT) restricting the beleaguered telecom operator from selling its assets till February 12.
The appellate tribunal passed the order in a petition filed by RCom and stated that RCom or any third party should not sell, transfer or alienate any of its assets (movable and immoveable), without its or the SC’s permission.
An RCom official, however, downplayed the impact saying that the ruling was mostly a process and procedure, rather than a restriction.
In May 2018, the Mumbai Bench of National Company Law Tribunal (NCLT) had passed an order after RCom reached an agreement to pay ₹550 crore to Swedish telecom equipment manufacturer Ericsson. The NCLT stated that RCom will be put under the Insolvency and Bankruptcy Code, 2016, in case the agreement was not honoured.
RCom had appealed against that order, and now with the company deciding to voluntarily move the NCLT, it had sought to withdraw the appeal.
The appellate tribunal has given Ericsson time till February 8 to file its reply, while the next hearing has been posted for February 12. RCom is restricted from selling its assets till the next hearing and has also been prevented from invoking any bank guarantee.
Reprieve from TDSAT
Meanwhile, in a reprieve to RCom, the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) directed the Department of Telecommunications to return a ₹2,000-crore bank guarantee provided earlier. This is as per TDSAT’s earlier order passed on July 3, 2018. The tribunal, hearing an RCom petition against DoT on the one-time spectrum charge issue, stated that up to 5 MHz of OF CDMA and up to 6.2 OF MHz GSM contracted spectrum have been exempted from one-time levies. In July 2018, TDSAT directed DoT to release the bank guarantees that RCom had provided in 2016 for spectrum, based on RCom’s appeal.
With RCom now moving the NCLT, Ericsson will continue to be an operational creditor.
“If RCom were to commence the Corporate Insolvency Resolution Process now, Ericsson will be considered as an operational creditor and will not be part of the Committee of Creditors. Like any other operational creditor, Ericsson will receive payment under the Resolution Plan which should not be less than the liquidation value,” Daizy Chawla, Senior Partner at Singh & Associates, a legal firm, said. These developments has got investors worried as there is uncertainty over RCom’s asset sale deal with RJio.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.