RCom crisis

This refers to the report ‘Anil Ambani goes into fire-fighting mode’ (February 22), on the fallout of the Supreme Court order directing him to clear the dues of ₹453 crore to Ericsson India forthwith. To recall, the apex court had held Reliance Communications (RCom) and its chairman, Anil Ambani, guilty of contempt of court for dishonesty and wilful default. Ericsson India, which signed a seven-year deal in 2014 to operate and manage RCom’s nationwide telecom network, had to approach the apex court when its efforts to get dues of over ₹1,500 crore failed.

The apex court had throughout been reasonable in its approach. It had given Anil Ambani the permission to sell the assets of RCom and discharge the liability. The deal with brother Mukesh Ambani came unstuck, as he refused to own the likely future debts of the firm arising out of past business deals. Incidentally, the newly formed Dassault Reliance Aerospace Ltd, the joint venture of the Anil Ambani-managed corporate cobweb and the French firm Dassault Aviation, is the Indian offset partner in the Rafale fighter jet contract. However, the details about the extent of the offset liability and the cash inflow into the company from the national exchequer, and the capital expenditure estimated to discharge the responsibility remain closely guarded. One has reason to be concerned if the newly formed joint venture too failed to take off. Its impact on the acquisition of the 36 Rafale aircraft would be inestimable.

Kozhikode

This is with reference to ‘Modi says Indian economy will soon double to $5 trillion’ (February 22). It is refreshing to note that international credit rating agencies have given a thumbs up to Modi government’s reform initiatives. Further, due to the government’s investor-friendly policies, foreign investors are enthusiastic about India. The government should further concentrate on development of infrastructure and removal of hurdles in investment. This will automatically draw investments, both Indian as well as foreign.

Nevertheless, it is a pity that India with vast natural resources and youth power has to still depend on FDI for development and economic growth. With good leadership, bold reforms, an environment conducive to industrial development and improvement in infrastructure, foreign nations will queue up to invest in India. However, it is a pity that due to high levels of corruption in government, investors are wary of pumping money into industries, especially those that require a lengthy clearance process by the government.

Thane

This refers to ‘Failure of duty’ (February 22). With a rapidly expanding market-driven economy, the role of regulatory institutions gets critical in maintaining the reputation of the government and the market and in keeping a check on institutions and companies. RCom’s bankers were clearly indulgent to a company whose ability to repay loans was in doubt from 2016, when Jio set off a tariff war. The firm did not go for sale of assets, instead waited endlessly for a bailout, either from the government or others

This laxity in oversight by established market institutions was mitigated somewhat by the Insolvency and Bankruptcy Code — a potent tool for resolving bad debts that has little respect for big reputations.

Navi Mumbai

The bank-led restructuring package for debt-ridden Jet Airways through debt-equity swap has raised many eyebrows. Debt-equity swap was tried earlier in the now-defunct Kingfisher Airlines, but it failed to yield any desired results on the ground. Though the supporters of the debt-equity swap move claimed it was different in the case of Jet Airways as Jet promoters would bring in more equity capital, what needs to be understood here is it would hardly provide a solution to the problem. Not only Jet but every player in the Indian airline industry is now struggling to stay afloat.

Sholavandan, TN

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