Mumbai: The National Company Law Tribunal on Thursday allowed Reliance Communications (RCom) to exclude the 357 days spent in litigation and admitted it for insolvency.
With this, RCom, which owes over Rs 50,000 crore to banks, has become the first Anil Ambani group company to be officially declared bankrupt after the National Company Law Tribunal (NCLT) on Thursday superseded its board and appointed a new resolution professional (RP) to run it and also allow the SBI-led consortium of 31 banks to form a committee of creditors (CoC).
At the last hearing, RCom, through the existing resolution professional, had sought 357 days (from 30 May, 2018 to 30 April, 2019) exclusion in the insolvency process citing the stays it had on the process by the appellate tribunal and the Supreme Court.
The RP sought the exclusion from 30 May, 2018 to 30 April, 2019 as the initial insolvency proceedings was stayed by the National Company Law Appellate Tribunal (NCLAT) and later by the apex court.
A bench comprising VP Singh and R Duraisamy said the matter should proceed in a manner of law and in view of the guidelines, the tribunal grants the exclusion of time for Reliance Infratel and Reliance Telecom along with RCom.
RCom was in trouble for years forcing it to discontinue operations two years ago. Its effort to stave off bankruptcy by selling spectrum to Reliance Jio got scuttled after legal and government delays for approvals. But it could not meet any of the several publicly made promises to pay back the lenders by monetising real estate and spectrum assets.
Last month, company chairman Anil Ambani managed to avoid a contempt of the Supreme Court and a possible jail term
after a last-minute bailout by elder brother Mukesh who extended him over Rs 480 crore to pay back vendor Ericsson, which was the first operational creditor to drag it to NCLT.
Ericsson took the company to NCLT in September 2017 for non-payment of over Rs 1,500 crore dues. Finally they agreed for a Rs 550 crore settlement.
Earlier, China Development Bank from which RCom had borrowed over $1 billion, had dragged it to NCLT which was settled after giving a portion of its headquarters DAKC in the nearby Navi Mumbai.
On 3 May, SBI held a meeting to shortlist an RP after issuing a request for proposal in April for a new RP. RCom's committee of creditors will have to approve a new RP with a 66 percent vote after the NCLT starts the insolvency process.
The Mumbai bench on 7 May, also had directed the existing RP to file a progress report by 30 May when it will hear the matter.
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Updated Date: May 09, 2019 15:40:55 IST