The Mumbai bench comprising of VP Singh and Ravikumar Duraisamy has directed the existing RP to file a progress report by May 30 when it will hear the matter
New Delhi: The National Company Law Tribunal (NCLT) on Thursday allowed debt-ridden Reliance Communications (RCom) to exclude the 357 days spent in litigation and admitted it for insolvency. Now, RCom which owes over Rs 50,000 to banks, has become the first Anil Ambani group company to have landed in the dock at NCLT. The tribunal also superseded the company’s board, appointed a new resolution professional to run it and allowed the consortium of its lenders, led by the State Bank of India (SBI), to form a committee of creditors.
RCom had sought 13 months’ exclusion
At the last hearing, RCom had sought 13 months’ exclusion in the insolvency process through the existing resolution professional, citing the stays it had got on the process from the appellate tribunal and the Supreme Court. RCom sought an exclusion from April 30, 2018 to May 30 as the initial insolvency proceedings were stayed by the National Company Law Appellate Tribunal (NCLAT) and later by the apex court.
What happens next?
A meeting was held by RCom’s lead lender, SBI, on May 3 to shortlist an RP after issuing a request for proposal in April for a new RP. RCom’s CoC will now have to approve a new RP with a 66 percent vote under the insolvency proceedings.
The Mumbai bench comprising of VP Singh and Ravikumar Duraisamy has directed the existing RP to file a progress report by May 30 when it will hear the matter.
RCom has been in troubled waters for years and had to discontinue operations two years back. Its efforts to avoid insolvency proceedings by selling spectrum to Reliance Jio also failed after a long legal battle and delays from the government for approvals.
Last month, Anil Ambani barely escaped a contempt of the Supreme Court and a possible jail term after a last-minute bailout by elder brother Mukesh Ambani, who gave him over Rs 480 crore to pay back vendor Ericsson.
Ericsson was the first operational creditor to have dragged RCom to NCLT last year. Earlier, China Development Bank, from which RCom had borrowed over $1 billion, had also taken the company to NCLT over the loan. The matter was, however, settled after Reliance gave a portion of its headquarters DAKC in the nearby Navi Mumbai.