Resolve your dispute, Ambani brothers: SC on RCom case

Chennai: As Mukesh Ambani-led Reliance Jio refused to give undertaking to comply with the Centre’s guidelines to purchase Anil Ambani-led RCom’s telecom assets, the Supreme Court has asked the two brothers to resolve the dispute between them.

The move comes after Reliance Jio did not show interest to comply with the guidelines that will see RCom’s assets come under its banner.

Reports state that although the Ambani brothers have agreed for the deal, they differ on the issue of who will be liable for past liabilities of RCom. This includes the spectrum usage charge due to the Centre as the deal was not being approved by the Department of Telecommunication (DoT).

Appearing before a bench of Justices R F Nariman and Vineet Saran, Reliance Communication’s lawyers Kapil Sibal and Mukul Rohatgi said Anil Ambani’s company would be responsible for the past liabilities. They told the bench that the firm is ready to provide a corporate guarantee of Rs 1,400 crore for the liabilities and stated that the DoT should issue ‘No Objection Certificate’ for the deal.

The bench thereafter asked senior advocate Harish Salve, appearing for Reliance Jio, whether he was agreeable to the proposal and ready to give undertaking to comply with the DoT guidelines on the deal.

Salve however replied that the company would not give such undertaking to the court till RCom gave bank guarantee to cover past liabilities.

“He (Mukesh Ambani) has no faith in your corporate guarantee,” the bench told RCom’s lawyers and asked both the companies to settle the differences on the issue.

Sibal insisted that the buyer company could not be held responsible for the past liabilities and that issue should be considered as an impediment to block the deal by DoT.

It must be noted that RCom was hoping to sell spectrum to Reliance Jio, and use the funds to pay Ericsson Rs 550 crore plus interest, besides other creditors.

But the Department of Telecommunications (DoT) rejected its spectrum trading pact with Jio, saying it didn’t conform to spectrum trading guidelines, prompting the Swedish company to decide to file fresh petitions.

Apart from the contempt petitions, RCom, weighed under a Rs 46,000 crore debt, faces the threat of revival of insolvency proceedings, which it had staved off earlier, citing a Rs 18,000 crore plan under which it planned to sell towers, fibre, switching nodes and spectrum to Jio, and some real estate to Canada’s Brookfield.

NT Bureau