SBI approaches Supreme Court to allow RCom asset sale to Reliance Jio
21 March 2018
State Bank of India on Tuesday pleaded before the Supreme Court to allow the sale of the assets of Reliance Communications Ltd (RCom).
It moved the Supreme Court on Tuesday challenging the arbitration tribunal’s order, which was upheld by the Bombay high court, that permitted Ericsson to stake a claim on RCom consolidated’s assets.
RCom requested the top court for a stay on the Mumbai High Court and National Company Law Tribunal (NCLT) decisions to bar it from selling its wireless assets to Reliance Jio without prior approval. Both petitions will be heard by the Supreme Court concurrently.
RCom owes Indian lenders Rs42,000 crore. SBI argued that as a secured lender, its claim took precedence over others.
On 8 March the Mumbai High Court had rejected RCom’s appeal against an order barring the sale or transfer of its assets without prior permission.
SBI has total dues of around Rs4,000 crore against RCom. Apart from it is in debt to 24 other Indian banks.
They had initiated sale through bidding of RCom Consolidated’s assets in the hope of recovering their dues.
However, Swedish telecom equipment maker Ericsson moved the arbitratoion tribunal seeking to restrain the sale of RCom consolidated’s assets in a bid to recover its claim of Rs1,150 crore from Rcom. The tribunal on 5 March allowed Ericsson claim, which RCom challenged and lost in the Mumbai High court on 8 March.
SBI in its petition before the Supreme Coyurt has challenged the Mumbai High Court decision saying an an unsecured creditor (Ericsson) could not be prioritised for payments over secured creditors like SBI.