Reliance Jio has refused to cover for any pending dues of RCom with the DoT.
In response, the DoT has struck down the spectrum trading deal that is so critical for RCom’s revival efforts. Anil Ambani’s efforts to get his company Reliance Communications (RCom) out of the Rs 46,000-crore debt trap and possible insolvency proceedings have suffered a major setback. The Department of Telecomm (DoT) has refused to accept the deal between RCom and Reliance Jio for sale of air waves. The Department took this decision after Reliance Jio sent a letter asking for an assurance that it will be absolved of all liabilities for the past dues of RCom.
According to DoT, this goes against their guidelines for spectrum trading. An official from DoT commented, “The trading rules clearly say DoT can ask both the operators or any one of them to pay the dues. Since Jio has imposed conditions, we cannot accept it (the deal) as it goes against the guidelines.”
The deal would have helped RCom clear its dues of around Rs 550 crore with Swedish telecom equipment maker Ericsson, for which the deadline of December 15 has already been missed. This can bring the company back into insolvency proceedings and also revive a contempt of court petition against Anil Ambani who had become the guarantor for timely payment.
DoT has pending claims of Rs 2,947 crore against RCom for which the two were engaged in a legal battle in the apex court. The SC had asked DoT to accept a Rs 1,400 crore corporate guarantee instead of a bank guarantee along with a land parcel from a subsidiary of RCom. But DoT has accepted this on the condition that if there are any issues with the collaterals, Jio will have to make the payments as the buyer. But Jio is not willing to accept any liability of the sort.
Once the news was announced, shares of RCom fell by upto 13.3% in early morning trade on Wednesday to Rs 13.65 per share.