The process of ending the Reliance Communications (RCom) scandal could put another strain on State Bank of India, Union Bank of India, and Indian Overseas Bank which separates telco accounts from its units – Reliance Telecom and Reliance Infratel – as fraud last week, said insiders. Lenders are now looking to launch a thorough investigation, said one of the people.
Applicants for the Reliance Jio Infocomm and UV Asset Reconstruction Co Ltd (UVARCL) may apply for a refund for any research conducted at these companies, the above-mentioned individuals said. The delay will also undermine the prospects for the recovery of lenders who were expecting Rs 20,000-23,000 crore from the sale of RCom assets and its units. Financial advisers said they owed $ 57,382.
It can slow down the recovery process
Lenders will need to make full arrangements for the disclosure of these accounts over the next four quarters and a decision on whether they want to report this to the investigating agency will be taken soon, said a bank official who is aware of the development. Of concern to bankers is that if investigators come into the picture, it could delay the repayment process if they view the firms’ money as a crime.
The latest allegations come a year after a legal audit found questionable transactions worth $ 5,500 million in three Reliance Group companies led by Anil Ambani. An investigation into the transaction between May 2017 and March 2018 found three major entries buried under the hundreds of thousands of others.
At the time of the application, RCom had a debt of Rs 46,000 crore. 53 financial lenders, including local and foreign banks, non-bank financial institutions, and funds cost Rs 57,382 crore, of which Rs 49,224 crore was approved by solution experts.
The allegations come as a court of law has ruled in favor of Reliance Industries (Reliance Digital Platform & Project Services) for Rs 4,975 crore. Meanwhile, UVARCL is awaiting approval by the National Company Law Tribunal (NCLT) for the acquisition of RCom and Reliance Telecom, which has fiber and fiber properties.
RCom was forced to close its wireless operations by the end of 2017, suffering from increased debt and increasing losses in the face of major competition in the telecommunications sector after Jio’s entry in September 2016. Delays arising from legal conflicts have already led to a 10% price reduction, according to some transactions.