NCLAT Pulls Up RCom Lenders Over Rs 37,000 Crore Asset Sale ‘Golden Outlook’
Signage for the State Bank of India Ltd. is seen at a branch in Mumbai, India, on January 27, 2017. (Photographer: Dhiraj Singh/Bloomberg)

NCLAT Pulls Up RCom Lenders Over Rs 37,000 Crore Asset Sale ‘Golden Outlook’

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The National Company Law Appellate Tribunal on Monday pulled up State Bank of India, the lead lender of debt-ridden Reliance Communications Ltd., along with others for giving a 'false impression' to monetise Rs 37,000 crore from asset sales of the telecom company to Reliance Jio Infocomm Ltd.

A two-member bench headed by Chairman Justice SJ Mukhopadhaya came down heavily on the lenders, especially SBI, and asked why a "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 the NCLAT to recover around Rs 37,000 crore from sale of assets but nothing happened.

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

The NCLAT was hearing a plea from RCom, which has approached the appellate tribunal seeking waiver over the moratorium placed by it on Feb. 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 550 crore.

The appellate tribunal asked the lenders why the order of the Supreme Court, directing the release of income tax refunds, 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 Feb. 20, the Supreme Court held RCom Chairman Anil Ambani along with two others guilty of contempt of court for wilfully violating its order by not paying Rs 550-crore dues to telecom equipment maker Ericsson.

The apex court had said they faced a three-month jail term if remaining Rs 453 crore was not paid to the telecom equipment maker in four weeks.

Also read: Supreme Court Finds Anil Ambani Guilty Of Contempt In Ericsson Case

Earlier on Feb. 4, the appellate tribunal had said that until further orders of the NCLAT or the Supreme Court, no one can sell, alienate, or create third party rights over RCom's assets.

"Until further orders, the Appellants, corporate debtor (RCom), Respondent (Ericsson India), guarantors or any third party will not sell, transfer or alienate any moveable or immoveable property of RCom nor invoke any guarantee or mortgage or any other instrument without prior permission ..," the tribunal had said.

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