China Development Bank has initiated insolvency proceedings against a second Anil Ambani-promoted firm, Reliance Telecom Ltd. at the National Company Law Tribunal.
CDB sought to club the insolvency pleas initiated by other creditors of Reliance Telecom so that these matters could be heard together. The Chinese bank’s move is, however, likely to be challenged before the tribunal by the Reliance ADAG Group, as per submissions by the company’s lawyers before the NCLT today. Talks are also on between the parties to settle the dispute out-of-court. The matter has been adjourned to Dec. 18.
Reliance Telecom is an arm of the debt-laden RCom which already has four insolvency insolvency cases pending at the NCLT.
CDB recently became the first lender to file insolvency proceedings against RCom, BloombergQuint had reported earlier. It named Alvarez & Marsal (A&M) India as the resolution professional in the matter, people familiar with the development said. The Chinese bank thus joined operational creditors Ericsson India Ltd. and Manipal Tech Ltd. which have filed similar petitions at the Mumbai branch of tribunal seeking resolution under the new Insolvency and Bankruptcy Code.
Most recently, public-relations firm Fortuna Public Relations Pvt. filed its plea, saying RCom owes it Rs 43 lakh. The matter is scheduled to be heard on Dec. 19.
Reliance Telecom offers Global System for Mobile communication cellular services in India. As of Sept. 8, 2006, the company operated as a subsidiary of RCom.
Reliance Telecom was the entity involved in the 2G scam. Earlier this year, the company also got into trouble with the telecom regulator for abruptly halting its services in select areas in Assam.
(An earlier version of this article said the plea against Reliance Telecom would be clubbed with CDB’s plea against RCom.)