Reliance Communications becomes the first company to file for Bankruptcy
- by Gitumani-Talukdar
- May 14, 2019 16:44
Anil Ambani’s company Reliance Communications have started with the bankruptcy proceedings in a major move recently. The company has sought permission from The National Company Law Tribunal (NCLT) to exclude the 357 days spent in litigation starting from May 30, 2018, to April 30, 2019) and admitted for its insolvency. It has been stated that Reliance Communications owes over Rs 50,000 crore to banks. The NCLT in return superseded its board and appointed a new resolution professional to run it and also allow the State Bank of India led a consortium of 31 banks to form a committee of creditors.
A deciding bench consisting of VP Singh and R Duraisamy stated that the matter should proceed in such a manner of law and in view of the guidelines, the grants of the tribunal along with the exclusion time for Reliance Infratel and Reliance Telecom along with RCom.
The discontinuation was not an instant move. Reliance Communications was in struggle for years more than two years ago. Its calculated move to stave off bankruptcy by selling spectrum to Reliance Jio got backfired due to delays in legal sanctions and Government approvals.
It was his brother Mukesh Ambani who helped him for settlement with vendor Ericsson, with Rs 480 crore. It was Ericsson who took RCom to NCLT back in September 2017 for non-payment of over Rs 1500 crore dues. Finally, they agreed for a settlement of Rupees 550 crore.
The bench in Mumbai also on MAY 7, directed the existing RP to mention a progress report by May 30, when it will again hear the matter.
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