RCom-Aircel deal hinges on SC order

MUMBAI: Even as the special CBI court has dropped all charges against the Maran brothers in the 2G case, the fate of the merger deal between Reliance Communications (RCom) and Aircel still depends upon the outcome of the Supreme Court order on Friday as the trial court had segregated the trial against the two accused Malaysian nationals - Ralph Marshall and T. Ananda Krishnan from that of the Maran brothers. Dayanidhi Maran is a former Union Minister and Kalanidhi Maran runs the Sun TV network.

The Supreme Court, in its last hearing on January 6, had barred Aircel from transferring the ownership of its airwaves, and had threatened to cancel the airwaves permits if the two accused Malaysian nationals - Ralph Marshall and T. Ananda Krishnan do not appear before the court on February 3, thereby throwing a spanner in the multi-billion Aircel-RCom deal.

However, industry watchers said that the case filed by Prashant Bhushan in the Supreme Court would be weakened after the special CBI court order.

“Today’s development is positive for the RCom-Aircel merger. The case in the 2G court, which forms the basis of the case in the Supreme Court, has been discharged. The case will come up for hearing in the Supreme Court on Friday,” said a person involved in the RCom-Aircel deal requesting anonymity as the matter is sub-judice.

When asked about the impact on Thursday’s order on the SC hearing on Friday, Ranjit Prakash, managing partner of Archeus Law firm told The Hindu, “Obviously, the impact is inevitable and that’s a natural consequence, which may have an cascading effect. Let us wait for more clarity tomorrow.”

Echoing similar feelings, Paras Bothra, president, equities at Aashika Stock Broking said, “The special court order will have a positive impact on the Aircel case as well and the impending deal with RCom may go through.”

Aircel, in its impleadment application before the Supreme Court in the spectrum attachment matter, said that the company was not owned by any individual, directly or indirectly, and had invested more than ₹40,000 since 2005-2006.

Aircel argued that the petition seeking attachment of assets was based on ‘incorrect facts’ as the applicants had not been accused in charge-sheet filed in October 2014 and no summons had been received from the trial court as accused in the 2G spectrum case. The company said that it had not issued any dividends so far and that it was misleading to say that there was any attempt to liquidate the assets and move them out of India.

On its merger plans with RCom, the Aircel petition said that no sale of spectrum was involved in the transaction and no cash was involved as Aircel was acquiring assets in merger, not selling assets.

On Mr. Marshal and Mr. Krishnan, the Aircel petition said that Mr. Marshall was no longer part of the MCB Group and Mr. Krishnan was not a director on the Board of the Company or its parent.

Strengthening the Aircel case, the SBI-led consortium of 15 banks (12 Indian banks and 3 overseas lenders) with exposure of more than ₹20,000 crore has also moved a separate impleadment application in the spectrum attachment matter as 100% equity of Aircel is pledged to the lenders.