NCLAT slams banks for giving a false impression on recovery of Anil Ambani’s telecom firm’s Rs 37,000 crore dues

Was it over-optimistic on part of banks to recover RCom's 37,000 crore dues? NCLAT raps them on the knuckles.

Was it over-optimistic on part of banks to recover RCom's 37,000 crore dues? NCLAT raps them on the knuckles.
Was it over-optimistic on part of banks to recover RCom's 37,000 crore dues? NCLAT raps them on the knuckles.

The National Company Law Appellate Tribunal (NCLAT) on Monday slammed State Bank of India (SBI), the lead lender of debt-ridden Anil Ambani’s Reliance Communications, along with others for giving a ‘false impression’ to monetise Rs.37,000 crores from asset sales of the telecom company to brother Mukesh Ambani’s Reliance Jio. The NCLAT observed that SBI was fooling them that they could recover Anil Ambani-led defunct telecom company’s dues from Jio buy out. The Tribunal Members found the connivance of lenders including SBI, when Anil Ambani filed a new petition to use the Income Tax reimbursement of Rs.260 crores to save the Ericsson dues payment.

The NCLAT was hearing RCom’s plea, which has approached the appellate tribunal seeking waiver over the moratorium placed by it on February 4.

A two-member bench headed by Chairman Justice S J Mukhopadhaya came down heavily on the lenders, especially the State Bank of India, and asked why “proceedings against them should not be initiated” for this. “You have failed. JLF (Joint Lenders’ Forum) has failed. No sale took place,” the bench observed. According to the bench, the lenders gave a “golden outlook” to NCLAT to recover around Rs.37,000 crores from sale of assets but nothing happened.

“You clapped with RCom and claimed that you would recover around Rs.37,000 crores from sale of assets to Reliance Jio… You had earlier cited losses of crores per day,” said NCLAT. After failing to get the money from assets, creditors are now trying to recover Rs.260 crores which the company has got from the Income Tax refunds, it added.

The NCLAT was hearing RCom’s plea, which has approached the appellate tribunal seeking waiver over the moratorium placed by it on February 4. However, its financial creditors are opposing its plea to release the Income-tax refunds to clear dues of Ericsson, to whom the company has to pay Rs.574 crores. The appellate tribunal asked from the lenders why the order of the Supreme Court, directing to release the income tax funds should not be implemented.

“Why not give effect to the orders of the Supreme Court? Sending someone (Anil Ambani) to jail will not solve the problem before us,” it said. The NCLAT has asked all the lenders to file a two-page note over that and directed to list the matter on Tuesday.

On February 20, the Supreme Court held RCom chairman Anil Ambani along with two others guilty of contempt of court for willfully violating its order by not paying Rs 574crore dues to telecom equipment maker Ericsson. The apex court had said they faced a three-month jail term if remaining Rs.453 crores was not paid to the telecom equipment maker in four weeks.

PGurus reported that, if no solution is found, mother Kokilaben will intervene to save her younger son from going to jail by selling or pledging her shares in Mukesh Ambani headed Reliance Industries Limited. As per the Supreme Court’s Order Anil Ambani had to find ways to pay Rs.574 crores or face jail term[1].

References:

[1] Where is Anil Ambani going to find Rs.574 crores in four weeks to avoid imprisonment? Mother Kokilaben to intervene? Feb 23, 2019, PGurus.com

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