NCLT declares Reliance Communications bankrupt

nclt-declares-reliance-communications-bankruptAnil Ambani headed Reliance Communications has officially made its way to the inglorious club of bankrupt firms. On Thursday, the National Company Law Tribunal admitted RCom for insolvency proceedings. RCom via its resolution professional had pleaded the tribunal to consider excluding 357 days spent in litigation. It cited several stays in the process by the appellate tribunal and with the Supreme Court. The tribunal agreed to RCom’s plea and has allowed it to be admitted for insolvency proceedings. A detailed court order is awaited but a PTI report on Thursday confirmed the development. This is the first ADAG [Anil Dhirubhai Ambani Group] company to be admitted for insolvency. The bench comprising VP Singh and R Duraisamy were reported as saying that the matter should proceed in a manner of law and in view of the guidelines, the tribunal granted the exclusion of time for Reliance Infratel and Reliance Telecom along with RCom. Also, the tribunal has superseded the existing RCom board and appointed a new resolution professional to run the company. SBI-led consortium of banks have been allowed to form a committee of creditors.
RCom’s financial troubles have been well documented. It began its journey on 28th December 2002 as a major challenger to existing players. By 2010, Rcom had an established market-capitalisation of Rs 34,500 crores. In the same year, subscriber base was reported at 100 million. Hell broke loose, when RCom reported on 1st February that it was forced to initiate insolvency proceedings. Soon, shareholders and market observers called the stock as a wealth-destroyer. The stock trading at a price of Rs 800 in 2008 touched to Rs 8 in 2019. More inside on market-capitalisation and RCom’s ten year journey. The Anil Ambani headed company blamed Mukesh Ambani’s Jio as unleashing a fierce price-war and thereby eating into its business. But, two months ago Anil thanked elder brother Mukesh Ambani for paying Rs 458.77 crores. This timely pay-out to Swedish telecom manufacturer Ericsson helped Anil avoid a jail-term. On a lighter note, here is a take by our cartoonist Satish Acharya on what may have transpired inside the courtroom when Anil Ambani was asked to pay dues or go to jail.

Filed in: Reliance Communication, Telecom News, Telecom Operators Tags: , , ,

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