SC AGR Hearing Updates: Should R-Jio pay RCom’s pending dues? How will govt get money from insolvent telcos?

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Updated: August 17, 2020 5:08:45 pm

SC AGR hearing HIGHLIGHTS: The Supreme Court continues hearing on spectrum sharing case today, while telecom companies such as Bharti Airtel, Vodafone Idea and Tata Teleservices await a verdict on staggered payments of AGR

SC AGR hearing, Reliance Jio, Reliance communicationsReliance Jio has paid its AGR dues of Rs 198 crore, while the total AGR dues of RCom stands at Rs 25,194.58 crore

SC AGR hearing HIGHLIGHTS: The Supreme Court adjourned the hearing on spectrum sharing case till Wednesday, August 19, 2020. A bench led by Justices Arun Mishra, S Abdul Nazeer and MR Shah heard the case. Senior advocate Harish Salve, who appeared for Reliance Jio today, said Jio isn’t acquiring Reliance Communications’ spectrum and not involved in any Insolvency and Bankruptcy Code (IBC) proceedings. Solicitor General Tushar Mehta told SC that Department of Telecommunications’ (DoT) view differs from views of Ministry of Corporate Affairs (MCA) on sale of spectrum under IBC. The view finalised by the SC is that spectrum cannot be sold under IBC. Mehta also said that spectrum is owned by the government but held by the company under insolvency, in trust, cannot be sold. People of the country are owners of the spectrum, held by the government in trust. “Tomorrow we should have details of arrears of Reliance Communications in black and white,” Justice Arun Mishra told Solicitor General.

Meanwhile, telecom companies such as Bharti Airtel, Vodafone Idea and Tata Teleservices awaited the verdict on staggered payments of adjusted gross revenue case (AGR). Reliance Jio has paid its AGR dues of Rs 198 crore. However, Jio claims that the amount paid also includes the RCom’s AGR dues for the eight circles for which it bought spectrum from it. The total AGR dues of Reliance Communications stands at Rs 25,194.58 crore.

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Highlights

    17:02 (IST)17 Aug 2020
    Bharti Airtel shares end 1.42% down

    Bharti Airtel shares ended 1.42 per cent down at Rs 521.40 apiece, as Supreme Court hearing on AGR dues was underway.

    16:52 (IST)17 Aug 2020
    SC adjourned hearing on AGR case till Wednesday

    Supreme Court adjourned hearing on AGR case till Wednesday, 2 PM.

    16:51 (IST)17 Aug 2020
    I want to check with SBI if they want to fight out: Harish Salve

    Harish Salve said that the battle is between two limbs of government - SBI on one hand and government on other side. I want to check with SBI if they want to fight out

    16:48 (IST)17 Aug 2020
    Contradicting SG fills me with fear: Harish Salve

    Senior Advocate Harish Salve says 2 big issues to address - IBC applying and how spectrum issues will play out.  He said that contradicting SG fills me with fear.

    16:44 (IST)17 Aug 2020
    Bharti Airtel through Kapil Sibal says we never shared

    Bharti Airtel through Kapil Sibal said "we never shared. It was in 2300 MzH band".

    16:43 (IST)17 Aug 2020
    Bharti Airtel is the buyer: SG Tushar Mehta

    "Bharti Airtel is the buyer," said Mehta. "Whether this trading arrangement was allowed by DoT?," Justice Mishra asked adding that how much AGR was to be paid

    16:42 (IST)17 Aug 2020
    Aircel was not sharing but trading: SG

    Solicitor General Tushar Mehta said that Aircel was not sharing but trading. Eight service areas including Andhra was traded

    16:34 (IST)17 Aug 2020
    Tomorrow we should have details of arrears of RCom in black and white: Justice Mishra to SG

    "Tomorrow we should have details of arrears of Reliance Communications in black and white," Justice Arun Mishra told Solicitor General.

    16:28 (IST)17 Aug 2020
    Don't want to hear on priority of distribution of funds at present: SC

    SC says it does not want to hear on the priority of distribution of funds at present, says it will come later. Tell us something on Section 18. Whether you have the right to touch it (spectrum)? asked Justice Mishra. 

    16:26 (IST)17 Aug 2020
    Bharti Airtel shares end 1.42% down

    Bharti Airtel shares ended 1.42 per cent down at Rs 521.40 apiece, as Supreme Court hearing on AGR dues was underway.

    16:25 (IST)17 Aug 2020
    Shyam Divan invites attention to preamble of IBC

    Senior Advocate Shyam Divan invites attention to the preamble of Insolvency and Bankruptcy Code (IBC).

    16:08 (IST)17 Aug 2020
    SC wants to see April order of Ericsson's case closure

    The Supreme Court wants to see the April order of closure of Ericsson's case after payment of Rs 550 crore was made.

    16:06 (IST)17 Aug 2020
    How has the value of assets depreciated so significantly: SC

    SC said that at the time of proposed sale to Reliance Jio, before IBC, RCom claimed assets of Rs 35,000 crore. "We want to know where the assets have gone? How has the value of assets depreciated so significantly?

    16:05 (IST)17 Aug 2020
    Would like to know what happened to net worth: SC asks

    "Now the value of assets has gone down. The value was around Rs 45,000 crore. How depletion happened. Would like to know what happened to net worth," SC asked.

    16:04 (IST)17 Aug 2020
    Asset sale didn't go through: Shyam Divan

    On Feb 19, 2019, sales of assets of around Rs 35,000 crore was mentioned. Shyam Divan said that asset sale didn't go through. 

    16:00 (IST)17 Aug 2020
    What is the asset value of RCom: Justice Arun Mishra

    Justice Arun Mishra asked "Who are the directors? What is the asset value of RCom?"

    15:59 (IST)17 Aug 2020
    RC plan has 100% CoC's approval: Shyam Divan

    Shyam Divan said ARC plan has 100% creditors of committee's (CoC) approval. Divan informed that about 141 parties were approached as prospective buyers. Bharti Airtel, UVARCL, etc., were approached.

    15:57 (IST)17 Aug 2020
    ARC will issue zero-coupon bonds, redeemable in 5 years to be issued to banks: Shyam Divan

    Shyam Divan said ARC will issue zero-coupon bonds, redeemable in 5 years to be issued to banks. Bonds can be redeemed, realised as the resolution applicant monetises the assets. Bonds of Rs 15,140 crore will be issued to banks.

    15:52 (IST)17 Aug 2020
    Spectrum can never be a subject matter of IBC: SG

    Solicitor General argued that spectrum can never be a subject matter of IBC. DoT had asked RCom in March 2019 why spectrum shouldn't be revoked over pending dues. The Corporate Affairs Ministry wanted spectrum sale to maximise value. RCom's resolution plan yet to be finalised

    15:50 (IST)17 Aug 2020
    Shyam Divan will take the SC through RP of RCom

    Shyam Divan will take the Supreme Court through RP of Reliance Communications. ARC has proposed to run the business as being run by Reliance Communications. 

    15:41 (IST)17 Aug 2020
    Give us bifurcation of dues year-wise: SC to SG

    "Give us bifurcation of dues year-wise," Supreme Court told Solicitor General.

    15:40 (IST)17 Aug 2020
    Spectrum is not defined as an asset under IBC: SC

    Spectrum is not defined as an asset under the Insolvency and Bankruptcy Code (IBC). The Supreme Court asks government to tell it by tomorrow what are the arrears.

    15:35 (IST)17 Aug 2020
    Spectrum an asset of the country, can't be sold in insolvency proceedings: SG

    It is for SC to decide the issue but DoT's view that spectrum cannot be subject to insolvency proceedings seems to correct as the spectrum is an asset of the country and cannot be sold in insolvency proceedings, says SG.

    15:34 (IST)17 Aug 2020
    SG taking SC through various IBC provisions

    Solicitor General taking the Supreme Court through various Insolvency and Bankruptcy Code (IBC) provisions

    15:31 (IST)17 Aug 2020
    People of the country are owners of the spectrum: Tushar Mehta

    Tushar Mehta said spectrum is owned by the government but held by the company under insolvency, in trust, cannot be sold. People of the country are owners of the spectrum, held by the government in trust, can not be sold under IBC.

    15:30 (IST)17 Aug 2020
    Harish Salve appears for Reliance Jio today

    In the previous hearing on Friday, Harish Salve appeared for State Bank of India (SBI). Today, Salve has appeared for Reliance Jio. 

    15:27 (IST)17 Aug 2020
    View finalised by SC is that spectrum cannot be sold under IBC: Solicitor General

    Solicitor General Tushar Mehta said Department of Telecommunications' (DoT) view differs from views of Ministry of Corporate affairs on sale of spectrum under IBC. View finalised by SC is that spectrum cannot be sold under IBC.

    15:26 (IST)17 Aug 2020
    Reliance Jio not acquiring RCom spectrum, not involved in any IBC proceedings: Harish Salve

    Harish Salve said Reliance Jio not acquiring Reliance Communications' spectrum and is not involved in any Insolvency and Bankruptcy Code (IBC) proceedings.

    15:25 (IST)17 Aug 2020
    The two issues include sharing and trading of spectrum: Tushar Mehta

    Tushar Mehta says two issues are there (1) Sharing and trading of spectrum, (2) Under IBC, whether spectrum can be subject matter

    15:24 (IST)17 Aug 2020
    DoT view is the proportion of law: Tushar Mehta

    At the outset, Mehta says DoT view is the proportion of law. He says diversion of views may not remain

    15:21 (IST)17 Aug 2020
    RCom-RJio deal didn't fructify: Shyam Divan in previous hearing

    In Friday's hearing, RCom's resolution professional Shyam Divan informed the court that RCom-RJio deal didn't fructify as the prospective buyer refused to give the undertaking to pay RCom debts.

    15:10 (IST)17 Aug 2020
    Reliance Jio’s spectrum trade deal with RCom failed, sharing continues

    Reliance Jio had signed a spectrum trading as well as sharing deal with Reliance Communications in January 2016, but while the former failed in 2018, the latter continues. Different set of guidelines govern spectrum trading and sharing. In trading, spectrum is bought from a telecom player and the seller clears all dues at the time of sale. Dues after the date of sale becomes a liability to the buyer, but if any past dues arise at a future date, the DoT is free to recover it from either party or from both.

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    15:04 (IST)17 Aug 2020
    SC AGR hearing to begin shortly

    The Supreme Court to begin hearing on adjusted gross revenue (AGR) dues of telecom companies shortly

    15:01 (IST)17 Aug 2020
    Reliance Jio may be served RCom’s Rs 13,000 cr bill; telecom department may raise demand for AGR dues

    The department of telecommunications (DoT) can charge Reliance Jio around Rs 13,000 crore as dues for adjusted gross revenues, if its wants, as the company had acquired 47.50 Mhz spectrum in the 800 Mhz band from Reliance Communications (RCom) through a trading pact between January-March, 2016. The spectrum was acquired across 13 circles and is currently being used by Jio to provide 4G services.

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    14:57 (IST)17 Aug 2020
    Reliance Jio has paid Rs 198 cr as its AGR dues

    Reliance Jio has paid its AGR dues of Rs 198 crore, while the total AGR dues of Reliance Communications stood at Rs 25,194.58 crore.

    14:49 (IST)17 Aug 2020
    Incremental SUC rate should apply on holding in shared band, not all: Trai

    Telecom regulator Trai has clarified that in cases involving sharing of radio waves, the stipulated increment of 0.5 per cent on SUC rate should apply only on spectrum holding in the specific band where sharing is taking place, not on the entire spectrum holding of the licensee, PTI reports

    14:48 (IST)17 Aug 2020
    Reliance Jio, RCom entered into a pact in January 2016

    Reliance Jio and RCom had entered into a pact in January 2016. Under the pact, the former traded and bought the spectrum of the latter in 8 circles in the 800 MHz band. For the remaining 17 circles it entered into a spectrum sharing deal in the same band. However, in 2018 the trading pact got annuled over the dispute between the two companies over giving an undertaking for any past dues which may arise in future. Jio refused to give any such undertaking and even Rcomm did not provide any such undertaking as a result of which the department of telecommunications did not approve the deal.

    14:39 (IST)17 Aug 2020
    Why Reliance Jio shouldn't pay AGR dues of Reliance Communications?

    The Supreme Court on Friday questioned why Reliance Jio should not pay for the adjusted gross revenue (AGR) dues of Reliance Communications if it has been using the latter’s spectrum since January 2016. The development has added a new twist into the AGR case by roping in Jio, which has been out of the picture so far.

    14:35 (IST)17 Aug 2020
    RP of insolvent telcos to furnish details on the use of spectrum

    SC in previous hearing directed resolution professionals of insolvent telcos to furnish details on the use of spectrum. RP for Reliance Communications and Aircel to also share details on which entities have placed bids under IBC.

    14:33 (IST)17 Aug 2020
    Jio-RCom spectrum sharing deal not connected with AGR liability: Sources

    Reliance Jio’s four-year-old telecom spectrum sharing deal with Reliance Communications (RCom) is not connected with the latter’s past statutory dues that pertain to the period prior to 2016 when Jio wasn’t even in operation, sources close to the company said.

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