SC provides partial relief to Rcom over asset sale to Jio
NEW DELHI: In a partial relief to Reliance Communications Ltd (Rcom), the Supreme Court on Thursday cancelled a March order of the Bombay high court that had rejected the company’s appeal of an order from an arbitration tribunal barring the sale or transfer of its assets.
Accordingly, Rcom is at liberty to proceed with the sale of spectrum, media convergence nodes (MCN) and real estate (at New Delhi, Chennai, Kolkata, Jigni and Tirupati) that were previously under challenge.
“It is not a block sale. The court has today paved way for sale of the spectrum, MCNS and real estate,” Punit Garg, executive director of Rcom, said in an interview after the court order. Other people aware of the developments have however, maintained that the asset sale is a block deal.
The top court also rejected the plea of Reliance Infratel, a subsidiary of Rcom, and the State Bank of India (SBI) challenging an order of the National Company Law Tribunal (NCLT) that stayed an asset sale to Reliance Jio Infocomm Ltd. A two-judge bench headed by justice A K Goel asked the parties to approach the National Company Law Appellate Tribunal (NCLAT) in accordance with law. Rcom is likely to move the appellate forum on Friday.
“As legally advised, and based on the order of the Hon’ble SC as above, Rcom is confident of securing appropriate relief from the NCLAT to enable sales of tower and fibre assets to also be completed at the earliest. The claim of the minority investors (which is fully disputed by Rcom) can, in any case, be a maximum of approx ₹200-300 crore from the sales proceeds,” a Rcom spokesperson said.
Rcom had moved the top court on March 19 seeking a stay on orders of the Bombay high court and the National Company Law Tribunal (NCLT) Mumbai bench, barring it from selling its wireless assets to Reliance Jio without prior approval.
The company was joined by SBI, which approached the court on March 20 seeking approval for the sale of Rcom’s assets to Reliance Jio.
The tribunal was hearing a petition filed by offshore investors of Reliance Infratel led by HSBC Daisy Investments (Mauritius) Ltd, which are alleging oppression of minority shareholders and mismanagement.
While Rcom owes a total of ₹45,000 crore to its lenders, total dues to SBI as on February 28 stood at ₹4,027 crore. On March 8, the high court had rejected Rcom’s appeal against an order of an arbitration tribunal barring the sale or transfer of its assets without prior permission.
The tribunal had passed the interim order on a plea by Swedish telecom equipment maker Ericsson for recovery of ₹1,012 crore from Rcom.