Airtel claims Aircel putting lenders over operational creditors
Airtel claims Aircel putting lenders over operational creditorsAirtel claims Aircel putting lenders over operational creditorsDevina Sengupta Aircel and its employees may still go ahead and file a contempt petition against Airtel for not paying the entire amount, as stipulated by the top court, people aware of the matter said.ET BureauJan 12, 2019, 11:33AM IST
MUMBAI: Bharti Airtel has accused bankrupt Aircel, which is trying to recover its dues from India’s No. 2 telco, of working towards benefitting its financial lenders at the cost of operational creditors.
Aircel entities or their resolution professional are seeking to enlarge the scope of their legal appeal, possibly with a view to take “illegal and unfair advantage” of a moratorium under Section 14 of the Insolvency & Bankruptcy Code and “to maximise recovery for financial creditors at the cost of operational creditors such as Airtel entities,” the Sunil Mittal-owned company said in an affidavit filed in the Supreme Court on Friday.
The affidavit was submitted as Aircel considered filing a contempt of court petition after Airtel paid the Maxis-owned operator about 75% of what was due. Airtel said it paid Rs 341.8 crore out of the total of Rs 453.7 crore to Aircel and its unit Dishnet Wireless on January 10, after deducting inter-connection charges that were due.
“The balance amount of approximately of Rs 112 crore has been adjusted and set off towards the various dues of approximately Rs 145.2 crore which were payable by Aircel entities to Airtel entities,” it said in the affidavit.
Aircel and its employees may still go ahead and file a contempt petition against Airtel for not paying the entire amount, as stipulated by the top court, people aware of the matter said.
“The deductions cannot happen now after the SC’s directions. The amount was not contested earlier by Airtel, so why the changes now?” one person asked. Aircel did not respond to ET’s queries.
Airtel said in its affidavit that it had the “legal and equitable right” to set off Rs 145.2 crore but had voluntarily applied to set off Rs 112 crore only.
The payment is vital for Aircel, which needs to maintain its assets so that they can be sold for a better value and its 3,000 employees can be paid their dues. Aircel, under debt of Rs 19,000 crore, is in the last leg of a corporate insolvency resolution process, which is being run by Deloitte.
The Supreme Court allowed Aircel employees this week to file a contempt case against Bharti Airtel, its unit Bharti Hexacom and the telecom department for not returning over Rs 453 crore to the company, as ordered by the apex court earlier. The court made Airtel and its unit a party to the case.
Airtel said Friday that since the money has been paid up, they are no longer required to be parties to the case because their obligation has been discharged.
The dispute between the two telcos and the telecom department has been going on for over a year. Airtel had paid Rs 298 crore in cash and submitted bank guarantees worth over Rs 453 crore to the telecom department on behalf of cash-stricken Aircel, adjusting the amount against its Rs 3,500 crore deal to buy Aircel’s spectrum.
The battle went on until the SC cancelled the bank guarantees, which meant Airtel had to pay over Rs 453 in cash to Aircel. DoT has until January 25 to return Rs 298 crore to Aircel.