An appellate tribunal slammed the lenders of Reliance Communications (RCom), especially the State Bank of India, for painting a rosy picture of the Anil Ambani-owned telco’s asset sale plan, which had turned out to be false, and questioned why action shouldn’t be taken against the joint lenders group. The two-member bench of the National Company Law Appellate Tribunal (NCLAT), headed by Justice SJ Mukhopadhaya, Monday said, “You have failed. JLF (Joint Lenders' Forum) has failed. No sale took place”. Further, the bench asked as to why “proceedings against them (lenders) should not be initiated” for misleading the tribunal by giving a “golden outlook” to recover around Rs 37,000 crore from sale of assets – to Reliance Jio Infocomm – but no such sale has taken place.
“You clapped with RCom and claimed that you would recover around Rs 37,000 crore from sale of assets to Reliance Jio...,” said the bench. The bench reacted sharply to SBI’s refusal to release income-tax refunds received by RCom to clear the Rs 453 crore that the operator needs to pay Swedish telecom gear maker Ericsson by March 19. SBI said it can’t release the funds till it gets clearance from all lenders. “Why not give effect to the orders of the Supreme Court? Sending someone (Anil Ambani) to jail will not solve the problem before us,” the bench observed. The Supreme Court on February 20 held RCom chairman Anil Ambani in contempt for not paying Ericsson its dues worth Rs 571 crore, including interest, despite having the money to do so and directed the telco and its units to pay the operational creditor the money in four weeks. Failing this, Ambani would go to jail for three months. RCom has already deposited Rs 118 in the apex court.
Arguing for RCom in the NCLAT on Monday, senior counsel Kapil Sibal said that the telco needs to pay Ericsson its dues by March 19 and the income tax refunds of around Rs 260 crore held by SBI should be deposited to the Swedish company directly. Sibal was assisted by lawyer Mahesh Agarwal. But SBI refused to do so, prompting the bench to say that after failing to get money from sale of assets, the lenders are now trying to recover Rs 260 crore from the refunds. NCLAT will next hear the matter on March 12. SBI is the lead banker in a consortium of 37 banks and financial institutions which are seeking to recover their dues from RCom. Ericsson is an operational creditor. RCom, under a debt of over Rs 40,000 crore, is simultaneously battling another case with HSBC Daisy and other minority shareholders of tower unit Reliance Infratel, which have filed a contempt petition against Anil Ambani over unpaid dues of Rs 232 crore. The top court on Monday disposed the petition on the grounds the matter is already pending in the NCLAT. The appellate tribunal is scheduled to hear the matter on March 27.