The National Company Law Tribunal (NCLT) Friday approved appointment of a common resolution professional (RP) as part of the corporate insolvency resolution proceedings against Reliance Communications (RCom), and its two subsidiaries Reliance Infratel (RITL) and Reliance Telecom.
According to the proceedings, the majority of the committee of creditors (CoC) across the three firms independently voted to appoint Anish Nanavati as the RP to replace the existing interim resolution professionals (IRP).
The process preceding the May 3-4 vote on the new RP involved calling for applications. The CoC received 59 applications, of which 23 applicants were asked to submit detailed applications. Of these, 16 responded with detailed presentations on technical capabilities, of which five were shortlisted and asked to respond with financial bids before the final RP selection was made.
The selection for a common RP was also supported by the rationale that the three companies have integrated business affairs with significant overlap of lenders among the three. The NCLT has directed the RP to submit a progress report on July 23. A pending petition by Doha Bank against RITL was not listed for Friday and will be taken up on June 28, the next date of hearing.
Earlier this month, the counsel representing Doha Bank — and referring to three other direct lenders as being a ‘syndicate of direct lenders to RITL’ — alleged that the IRP’s decision to admit claims of Rs 8,000 crore, based on bankers invoking corporate guarantees issued by Reliance Infratel to help secure loans for Reliance Communications, diluted the voting share of direct lenders to RITL within the CoC.
The counsel alleged that the direct lenders’ syndicate had lent RITL around Rs 1,400 crore, while State Bank of India’s direct exposure stood at Rs 900 crore and the exposure of operational creditors was at Rs 300 crore.