DOT's opposition to airwaves sales
In the time of insolvency resolution process, The department of telecommunications is opposing of airwaves sales by bankrupt telcos making AIRCEL and RELIANCE COMMUNICATIONS less promising to the buyers.
The sell it by way of auctions since the government is the licensor with accordance to existing law during the bankruptcy process involving moving to the supreme court if necessary. The department of telecommunications will take legal steps ensuring that the other party doesn’t get the right to sell the spectrum owing to the view that the range is a finite and sovereign asset and belongs to the government but not the telco, believing that the government has the authority to is assumed to be present at the ongoing hearings of AIRCEL insolvency process at the national company law tribunal.
The DOT is exploring all legal options whether this transaction can be removed from IBC, believing if spectrum sold by the resolution professionals the market price of airwaves is far less than its previous price under the Insolvency and Baknruptcy code 2016.
UV Asset Reconstruction Company Ltd. (UVARCL), which is looking to take over Aircel, will argue averse to DOT's belief that the spectrum is not the part of other assets of the company and The DoT can take away the range.
The NCLT will next hear the Aircel matter on June 10 while the next hearing on Reliance Communications is scheduled for June 21.
The NCLT appointed interim resolution professionals (IRPs) of Reliance Communication who has a debt of Rs 46,000 crore, and two of its subsidiaries have admitted claims of about Rs 66,000 crore against the companies. Aircel which has a deficit of about Rs 20,000 crore.
Mails to RBSA Advisors LLP, IRPs of Reliance Communication and its two units didn’t respond till the time of going to a hearing.
Manoj Kumar, partner at insolvency specialist firm Corporate Partners, backed DoT’s stance. Saying that “I believe, legally, DoT is right. The spectrum is government property, and the telecom operators are just licensees. If the licensees are not able to use it or can’t pay a fee, the spectrum license may be revoked’’, adding that the “Similar situation may arise in all the cases where the critical asset is government licenses, like mining license. If insolvency licenses are revoked, then there would be little hope of resolution.