JANUARY 7, 2018
NEW DELHI – The Supreme Court of India on Monday issued a notice to Anil Ambani on a contempt plea by Ericsson India Pvt. Ltd seeking initiation of contempt proceedings against the chairman of Reliance Communication Ltd (RCom) for allegedly not complying with its order to clear dues of Rs 550 crore towards the completion of the assets sale with Reliance Jio Infocomm Ltd.
Ericsson had also sought that they be “detained in civil prison” unless they purge themselves by making the payment.
A bench headed by Justice R.F. Nariman also allowed RCom to deposit Rs 118 crore towards its dues. RCom had offered to lay the amount by way of two demand drafts.
The court also highlighted the need for RCom and Reliance Jio to sit together and resolve the issue over past dues.
“Sit down and resolve this between yourselves, it’s not for us. Till you don’t resolve between yourself, we can’t do anything.”, Justice Nariman said.
The court also questioned Reliance Jio if it was willing to give an undertaking to abide by the spectrum trade guidelines. Reliance Jio expressed difficulty in doing so.
Senior lawyer Harish Salve, appearing for Reliance Jio said, “Knowing the problems with prior dues and when giving physical guarantee, we can’t take the risk.”
The court was responding to a contempt petition by RCom against the department of telecommunications (DoT) claiming that it failed to furnish a no-objection certificate clearing RCom’s spectrum deal with Reliance Jio Inforcomm Ltd (RJio) even after the court had directed it to do so.
This means that the proposed asset sale, announced in December 2017 and initially expected to be cleared by March 2018, will be delayed again, affecting repayment to the lenders of RCom.
The Supreme Court had on 30 November cleared the sale of spectrum by Anil Ambani-controlled RCom to elder brother Mukesh Ambani’s Reliance Jio on the condition that the seller furnished ₹1,400 crore as corporate guarantee to the government within two days. This corporate guarantee, to be furnished by Reliance Realty, a unit of RCom, was in addition to the land parcel that had to be given as security. The Supreme Court had also asked the central government to grant a no-objection certificate within a week of receiving the corporate guarantee.
But DoT, on its part, refused to furnish the no-objection certificate after Reliance Jio did not agree to assume payment liabilities of RCom to complete the spectrum trading deal between the two companies.
Under the government’s spectrum trading guidelines, DoT has the right to recover these dues.
The apex court had on 23 October last year asked RCom to clear the dues by 15 December holding that interest of 12 per cent per annum would be attracted for delayed payment.
Senior officials of RCom and Reliance Jio had last month also met telecom secretary Aruna Sundararajan to resolve issues flagged by the DoT around payment related to the spectrum deal between the two companies.
Meanwhile, Reliance Jio has also extended the term of the definitive agreement for the acquisition of specified assets of RCom and its affiliates to 28 June 2019, Jio’s parent Reliance Industries Ltd said in an exchange filing on 31 December.
The RCom-Jio deal is crucial for the Anil Ambani firm as the beleaguered telecom operator, which had been struggling with a mountain of debt and a failed merger with Aircel, finally decided to wind up it’s wireless business in December 2017 and announced a deal with Reliance Jio under which RCom’s assets, including 122.4MHz of 4G spectrum in the 800/900/1,800/2,100MHz bands, more than 43,000 towers, 178,000 route km of fibre with a pan-India footprint and 248 media convergence nodes covering 5 million sq. ft used for hosting telecom infrastructure, would be bought by Reliance Jio.
RCom wanted to seal the deal by March 2018, but all assets have not been sold yet.
The case will be heard next on January 11.
Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in the Bombay high court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.
Courtesy/Source: LiveMint
