on Jun 10, 2021)Mumbai: In a bid to get the resolution of Anil Ambani’s Reliance Infratel back on track, lenders led by have said that the ‘fraud’ tag on the company would go once it is acquired by Mukesh Ambani’s Reliance Jio. However, the criminal investigations would continue in respect of the erstwhile promoters.
Last month, Mukesh Ambani-led Reliance Jio Infocomm had moved the National Company Law Tribunal (NCLT), seeking disclosures of a forensic audit report of Reliance Infratel after some lenders classified the loan as ‘fraud’. This classification happened after the NCLT had approved Jio’s resolution plan to pick up the tower and fibre assets of the Anil Ambani group company for around Rs 4,400 crore on December 3, 2020.
This turn of events had resulted in the resolution plan getting delayed. According to banking sources, it is already established by law that after implementation of a resolution plan under the bankruptcy code, the fraud tag on the company facing bankruptcy proceedings is removed and criminal proceedings will apply only against the erstwhile promoters of Reliance Infratel.
The NCLT had in April reiterated that rules under the code will hold precedence over other laws and actions, such as attachment of property by the Enforcement Directorate. The court had also held that the ED cannot attach properties of and Power — a company sold under the bankruptcy process to JSW — for frauds committed by the previous management.
Lenders have informed the court that once Reliance Jio takes over by implementing the resolution plan, banks would strike the name of the company from the fraud or wilful defaulters’ list. However, this would not have any impact on the action against the erstwhile management or promoters.
