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Paytm's parent company drags Reliance Communications to NCLT

Paytm parent One97 Communications has moved insolvency court against Reliance Telecom citing non-payment of dues.

twitter-logo BusinessToday.in   New Delhi     Last Updated: September 26, 2018  | 15:39 IST
Paytm's parent company drags Reliance Communications to NCLT

Last week, Reliance Group chairman Anil Ambani had announced that cash-strapped Reliance Communications Ltd will completely exit the telecom business. But the road there won't be easy given the legal tangles that the company and its subsidiaries are embroiled in.

According to The Economic Times, Paytm parent One97 Communications has moved insolvency court against Reliance Telecom citing non-payment of dues. Sources in the know told the daily that RCom tried to come to a settlement with One97 but the talks fell through and now the case has been filed before the National Company Law Tribunal (NCLT) to recover dues worth Rs 20 crore. The NCLT's Mumbai bench has scheduled the hearing for October 26.

The development comes at a time various other court cases have already delayed RCom's asset monetisation sale. Struggling under a debt of Rs 46,000 crore, RCom is selling its assets to Reliance Jio Infocomm (Jio) and Canadian asset management company Brookfield for Rs 18,000 crore.

However, while the company managed to sell its fibre and nodes to Jio for Rs 5,000 crore, its legal tussle with the Department of Telecom (DoT) has thrown a spanner into the larger spectrum sale deal with the Mukesh Ambani-owned telco. Last month, RCom moved the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) against DoT's demand for spectrum usage charges of about Rs 3,000 crore.

The hearing by the telecom tribunal is reportedly scheduled for today but with DoT recently having escalated matters to the Supreme Court, against multiple operators, an early resolution seems unlikely.

Adding to its woes, the company law tribunal previously directed RCom to pay Swedish telecom equipment maker Ericsson Rs 550 crore by September 30 to settle its dispute over dues. Failing this, any sale to Jio will be nullified and the company will be dragged back into insolvency proceedings. Besides, RCom needs to pay Rs 232 crore to minority shareholders of its tower arm Reliance Infratel under a separate settlement of a dispute.

RCom will now be hoping for a quick resolution to the challenge posed by One97, where Anil Ambani-owned Reliance Capital once held a stake.

Edited by Sushmita Agarwal

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