HSBC Daisy moves Supreme Court in Anil Ambani, Reliance Infratel’s Rs 230 crore default case

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New Delhi | Published: March 12, 2019 6:06:58 AM

HSBC wants to restrain the Reliance group from withdrawing the appeals filed against the National Company Law Tribunal that commenced the corporate insolvency resolution process.

hsbc, sc, supreme court, nclatHSBC in its appeal before the SC said the NCLAT had been adjourning the contempt petitions despite the firm having intentionally and willfully committed breach of their undertakings before the NCLAT.

Offshore investors led by HSBC Daisy Investments (Mauritius) and other minority shareholders on Monday moved the Supreme Court against the National Company Law Appellate Tribunal (NCLAT) order that deferred hearing on its contempt petitions “six times” over an alleged default in payment of Rs 230 crore against Reliance Infratel and its promoter Anil Ambani. A bench led by justice RF Nariman refused to interfere in the case, but said that it has “no doubt that the NCLAT will take up the case” on March 27, the next date of hearing.

As per the consent terms of the agreement between Reliance Infratel, HSBC Daisy and others, recorded by the NCLAT in its order dated June 26, 2018, the Anil Ambani-owned firm was to pay the amount within a period of 180 days. After the expiry of the six-month period, HSBC Daisy and other nine minority shareholders holding 4.26% stake in Reliance Infratel have filed contempt pleas against Anil Ambani and other officials of Reliance Infratel, the unit that houses RCom’s towers and fibre assets.

HSBC in its appeal before the SC said the NCLAT had been adjourning the contempt petitions despite the firm having intentionally and willfully committed breach of their undertakings before the NCLAT.
It said that Ambani and his company has no intention of honouring their undertakings which is clear from the fact that they have neither provided the bank guarantee nor made any payment as per their unconditional undertakings before the NCLAT.

HSBC also wants to restrain the Reliance group from withdrawing the appeals filed against the National Company Law Tribunal that commenced the corporate insolvency resolution process. It said that by reviving the insolvency process, the Ambani firm wants to avoid its payment obligations.

The NCLT, Mumbai, in its interim order of March 12 last year had restrained Reliance Infratel and others from selling its assets. The order was passed on HSBC Daisy’s plea alleging oppression of minority shareholders and mismanagement for not taking their consent for the asset sale as per the Articles of Association of the company. In July 2007, HSBC Daisy Investment along with a clutch of other investors had invested around Rs 1,100 crore in Reliance Infratel for about 5% stake, which has now come down to 4.26%.

“The respondents had undertaken to furnish an unconditional and irrevocable bank guarantee to secure Rs 230 crore to the petitioners by June 30, 2018, and had further given unconditional undertaking to make such payment by November 2,” HSBC’s appeal stated, while seeking a 12% interest per annum on Rs 230 crore to be paid by the Reliance firm as per undertakings.

The NCLAT ought to have appreciated that the undertakings are “unconditional and not linked to the proceeds of sale from any assets”, including sale of assets to Reliance Jio Infocomm, or the outcome of proceedings before the TDSAT,” it added.

It may be noted that the Supreme Court on February 12 had held Anil Ambani-led Reliance Communications and its two other companies guilty of contempt for failing to pay dues of `550 crore to Swedish telecom equipment maker Ericsson. A fine of `1crore each was also imposed on the three Reliance companies — RCom, Reliance Telecom and Reliance Infratel — for failing to adher to deadlines fixed for payment to Ericsson. The companies were asked to pay the dues within four weeks, failing which the three chairmen, including Ambani, will suffer three months’ jail term.

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The Swedish telecom equipment manufacturer had also filed three contempt application seeking freezing and auctioning of personal assets of Ambani for “wilfull and malicious disobedience” of the Supreme Court’s orders and also the RCom chairman’s detention in “civil prison”.

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