SBI gave false hope on RCom sale to Reliance Jio: NCLAT pulls up India’s largest bank

The National Company Law Appellate Tribunal (NCLAT) on Monday admonished State Bank of India (SBI), saying the lender had given a false impression that the RCom-RJio deal would fetch about `37,000 crore.

The NCLAT bench wondered why should there not be proceedings against the lender for painting a rosy picture of RCom. “SBI created false impression, gave a rosy picture before us,” the two-member NCLAT bench, headed by chairperson SJ Mukhopadhyay observed.

The appellate tribunal said the country’s largest lender had “clapped with RCom” or, in other words, worked with the telecom player.

“You (SBI) have failed. JLF has failed. No sale took place. You clapped with RCom and claimed that you would recover around Rs 37,000 crore from sale to Jio. You cited losses of crores per day. You failed and now will seek to recover `260 crore,” the bench observed.

The appellate tribunal pulled up SBI for not releasing the Rs 260-crore income tax returns lying with it, which could be used by RCom to pay Swedish telecom equipment maker Ericsson. The bench was hearing a plea by RCom seeking the tax refund be released in favour of Ericsson.

The release would help RCom to clear a part of its its Rs 550-crore dues to Ericsson. The Supreme Court had, on February 20, held RCom chairman Anil Ambani and two others guilty of contempt for violating its order by not paying dues of `550 crore to Ericsson. The apex court had said that they would face a three-year jail term if the company failed to pay up within four weeks.

It also reminded the lenders that once the corporate insolvency resolution process (CIRP) begins, lenders would not get the `260 crore since it would go to the corporate debtor. The NCLAT had earlier halted insolvency proceedings against RCom after the case was admitted by the Mumbai bench of National Company Law Tribunal (NCLT) on May 15, 2018. The apex court had on October 23 asked RCom to clear the dues by December 15, 2018.

RCom has already deposited Rs 118 crore with the Supreme Court. Moreover, it has asked lenders to release the the income tax refunds of Rs 260 crore directly to Ericsson. The company is planning to raise Rs 200 crore to pay Ericsson Rs 550 crore including interest.

“Why should SC orders not be respected? Sending someone (Anil Ambani) to jail will not solve the problem before us. The SC has directed the company to repay the money,” it observed.

On February 4, the NCLAT had allowed Ericsson to file its reply on RCom’s plea for withdrawal of the appeals. The appellate tribunal had also directed the company not to sell, transfer or alienate any moveable or immovable property of the company without the prior permission of the NCLAT.