Industrialist Anil Ambani-promoted Reliance Communications (RCom) was admitted for bankruptcy proceedings at the National Companies Law Tribunal (NCLT)'s Mumbai branch on Thursday, news agency Press Trust of India reported. The tribunal allowed Reliance Communications to exclude the 357 days spent in litigation, making it the first Reliance Group group company to be officially declared bankrupt. The company has a debt of over Rs 50,000 crore towards a consortium of banks led by the country's largest lender State Bank of India.
Reliance Communications had in the last hearing sought exclusion of 357 days through its resolution professional (RP) in the insolvency process citing stays it had on the process by the appellate tribunal and the Supreme Court, the agency reported.
The NCLT on Thursday superseded RCom's board and appointed a new resolution professional to run it and also allowed the SBI-led consortium of 31 banks to form a committee of creditors, the report added.
Anil Ambani avoided a jail term in March by paying Swedish telecom equipment maker Ericsson Rs 458.77 crore in dues. He thanked elder brother Mukesh Ambani for his "timely support" in paying his dues.
Ericsson took the company to the National Companies Law Tribunal in September 2017 for non-payment of dues worth over Rs 1,500 crore. Finally they agreed for a Rs 550-crore settlement.
Anil Ambani's Reliance Communications was forced to discontinue operations two years ago after Mukesh's Reliance Jio Infocomm disrupted the telecom industry by launching aggressively priced data and voice call plans.
Earlier, China Development Bank - from which Reliance Communications had borrowed over $1 billion - had dragged the company to the NCLT which was settled after the Indian company gave a portion of its headquarters in DAKC near Navi Mumbai, the PTI report added.