ET: Reliance Communications moves NCLAT to stop permit cancellation

20 March 2019: Reliance Communications has moved the National Company Law Appellate Tribunal, asking it to direct the telecom department not to cancel its mobile permits for missing a spectrum payment. The Anil Ambani-led telco is said to have also sought the appellate tribunal’s intervention to ensure that the government does not invoke RCom’s bank guarantees, citing an NCLAT order dated February 4 to that effect.

The Department of Telecommunications had issued a notice to RCom, asking why its licences shouldn’t be cancelled after defaulting on a Rs 21 crore spectrum payment due on March 13.

The development comes a day after Reliance Industries chairman Mukesh Ambani saved his younger brother Anil from imprisonment by helping him to clear Rs 580 crore of dues to Ericsson before a Supreme Court-set deadline of March 19.

Separately, State Bank of India, the principal lender to debt-laden RCom, is said to have also written to DoT, citing the NCLAT’s February order barring the invocation of RCom’s bank guarantees.

However, the department is learnt to have said that the NCLAT order does not apply in this case since “RCom is no longer in the picture as the matter is between the government (read: DoT) and SBI, which is the guarantor of the RCom’s spectrum dues,” a person with direct knowledge of the matter said.

RCom’s March 13 spectrum payment deadline included a 10-day grace period. A telco has 20 days to respond to a show-cause notice.

Failure to pay DoT may lead to the withdrawal of airwaves against which payment is due. In RCom’s case, it’s 4G airwaves in the 800 MHz band in Mumbai, purchased in 2015 and used by Reliance Jio Infocomm under a spectrumsharing pact.

RCom, weighed down by debt of some Rs 46,000 crore, is due to pay another instalment of Rs 281 crore in April for spectrum in the 800 MHz band bought from Sistema Shyam Teleservices in eight circles.

At press time, RCom and SBI did not reply to ET’s queries.

RCom had approached the NCLAT to withdraw an appeal it had filed for a stay order on an insolvency petition granted by the dedicated bankruptcy court last year. In February, the appellate tribunal said the company, guarantors or third parties should not invoke any guarantee or mortgage any instrument without the court’s permission until further orders.

DoT also has Rs 2,000 crore of bank guarantees of RCom, which it hasn’t returned. ET reported earlier that DoT planned to appeal in the Supreme Court against the Telecom Disputes Settlement & Appellate Tribunal’s recent order to return the bank guarantees worth Rs 2,000 crore given by RCom towards one-time spectrum charges.

The Economic Times reported

Categories: General News, India Bankruptcy

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