NEW DELHI: Anil Ambani-led Reliance Communications (RCom) on Tuesday successfully withdrew its petition challenging a National Company Law Tribunal (NCLT) order that allowed insolvency resolution process against the company as the debt-laden telecom firm had on February 1 decided that it would file for insolvency.
The National Company Law Appellate Tribunal (NCLAT) permitted a plea by Reliance Communications (RCom) to readmit insolvency proceedings under the Insolvency and Bankruptcy (IBC) code. “In light of the order passed by the Supreme Court, we allow the appellant (RCom) to withdraw the appeal. The interim order on stay of insolvency proceedings stands vacated,” said a two-judge bench led by Justice SJ Mukhopadhaya on Tuesday.
It is reported that Swiss telecom equipment manufacturer Ericsson, which received its dues of Rs 550 crore from RCom following a Supreme Court order, had opposed the move as there is a possibility that Ericsson India may have to refund the entire amount it got from RCom if insolvency proceedings against the latter were allowed to restart.
RCom had paid Rs 458.77 crore to Ericsson, to avoid a potential three-month jail term for its Chairman Anil Ambani on March 18, a day before the deadline set by the Supreme Court was to expire. Ericsson had in September 2017 moved insolvency petitions against RCom and its two subsidiaries- Reliance Telecom and Reliance Infratel at the Mumbai Bench of NCLT for failing to pay their dues of around Rs 1,500 crore.
The Mumbai bench of NCLT on May 15, 2018, admitted an insolvency petition.
RCom in May last year had filed a petition before NCLAT against the NCLT order and had reached an agreement with Ericsson India to pay Rs 550 crore within 120 days which was September 30, 2018. However, days before the deadline was to be over, RCom approached the Supreme Court, seeking an extension to the deadline to pay the amount. The apex court had granted RCom and its subsidiaries time till December 15, and made it clear that no further extensions would be granted. However, RCom which had stuck a deal with Mukesh Ambani’s Reliance Jio to sell its spectrum and other assets to raise funds and reduce its debts had to call off the deal as it was involved in a tussle with department of telecom.
While it eventually paid off dues of Ericsson, the company on February decided to go for insolvency preceding.
RCom board had noted that despite the passage of so much time, the lenders had received zero proceeds from the proposed asset monetisation plans and the overall debt resolution process was yet to make any headway.