Equipment maker Ericsson has roped in senior counsel Darius Khambata to represent it in its insolvency petition against Reliance Communication (RCom) at the National Company Law Tribunal (NCLT).
Khambata is also representing China Development Bank (CDB) in its insolvency plea against the Anil Ambani owned company to recover dues worth $1.78 billion (Rs 11,460 crore). The Bombay High Court lawyer said there was no intent to merge the cases at the moment, but “that would eventually happen once any of the insolvency petitions was admitted”.
The acceptance of insolvency will also supersede the strategic debt restructuring being carried out by RCom’s domestic lenders, he said. The insolvency petitions against RCom and its subsidiaries will be heard by NCLT on December 18.
On Monday, RCom’s counsel told the NCLT bench represented by Justices BSV Prakash Kumar and V Nallasenapathy that the company had filed an affidavit contending the bank certificates filed by Ericsson were not in accordance with the court’s rules.
The Swedish firm had filed bank certificates from HDFC Bank and Citibank on November 16, stating the company did not receive any amount from the Ambani-owned operator. A bank certificate refers to a document issued by an Indian bank showing a default in payment because money hasn’t come into an account.
According to sources, the RCom affidavit said the bank certificates were issued on the basis of certificates provided by chartered accountants, which is not permissible. The operator said the certificates record the period from April 2017 and do not reflect payment details before March of this year. The third point in the affidavit, according to sources, was that Ericsson did not file the letter it had sent to the banks with the tribunal. RCom did not respond to an email sent by ET.
Ericsson had earlier told the tribunal that RCom had not paid its dues for past two years and only a few postdated cheques had been given. In September, it filed for insolvency in NCLT to recover Rs 1,150 crore from the operator for services and equipment supplied. Negotiations between the two to reach an out-of-court settlement have failed so far.
RCom, under a debt pile of Rs 45,000 crore, has five insolvency petitions filed against it. Apart from Ericsson and CDB, other petitioners include Fortuna Public Relations, which claims the telco owes it. Rs 47.65 lakh, Manipal Technologies, which has moved NCLAT to recover Rs 2.74 crore from RCom, and IT firm Tech Mahindra, which has since agreed to settle its demand for Rs 8.2 crore out of court.
CDB, which accounts for 37.11% of RCom’s total secured debt, moved NCLT in November against both RCom and its subsidiary Reliance Telecom since the former was the guarantor and the latter the principal borrower. RCom on November 30 had said that majority of its lenders have decided to oppose China Development Bank’s insolvency filing.
In October, after its merger with Aircel fell through, Reliance Communication applied for a fresh plan from its lenders, under which banks could convert some debt and take 51% stake in the telecom operator. Banks could then raise funds by selling the telco’s towers and spectrum to potential buyers, including Reliance Jio, and monetise real estate assets.
Source: Economic Times