Reliance Jio Infocomm has moved the bankruptcy tribunal for forensic audit reports on tower firm Reliance Infratel and parent Reliance Communications, both of whose accounts were declared as fraudulent by some creditors.
In December last year, the tribunal had okayed billionaire Mukesh Ambani-controlled Jio's resolution plan to pick up the tower and fibre assets of Reliance Communications – housed under Reliance Infratel -- for around Rs 4,000 crore.
“We want a copy of the forensic audit report (from lenders) so that we can make an assessment of how it will impact the resolution plan,” Jio counsel Vikram Nankani was quoted as saying by The Economic Times.
The National Company Law Tribunal (NCLT) has directed Jio to furnish application copies to all parties and asked them to file their replies by June 10, when it is set to hear the matter.
Weeks after the tribunal okayed Jio’s plan in December, State Bank of India, Union Bank of India and Indian Overseas Bank classified accounts of bankrupt telco Reliance Communications and units -- Reliance Telecom and Reliance Infratel -- as fraudulent.
This came after a report in June 2019 that the lenders had initiated an audit of Reliance Communications and its two group entities between April 2014 and December 2018.
A year later, Jio now seeks those audit reports on questionable transactions worth Rs 5,500 crore in the three Anil Ambani-led Reliance group entities.
Jio, India’s largest telecom firm, told NCLT that it wanted the reports to know why the banks had classified the accounts as fraudulent.
Going by The Economic Times, Jio claims that while the fraud report was available with the banks in October 2020 itself, they had failed to disclose them before the approval of the resolution plan.
This could also dent recoveries for lenders that are awaiting approval for Delhi-based UV Asset Reconstruction Company’s resolution plan stuck due to a regulatory hurdle. UV ARC had filed a Rs 14,000 crore bid for spectrum, real estate assets as well as enterprise and data centre businesses in Reliance Communications and Reliance Telecom.
Reliance Communications along with other units was admitted into bankruptcy in May 2019 after the appeals tribunal vacated a stay on insolvency proceedings.
The Anil Ambani group companies have a debt of over Rs 1 lakh crore with Reliance Communications accounting for Rs 49,193 crore, followed by Reliance Telecom at over Rs 24,306 crore.
Reliance Communications was forced to shut down its wireless operations in late 2017 after the entry of Jio hurt the firm. Jio had also tried to buy assets before Reliance Communications entered bankruptcy but called off the deal in March 2019.