Aircel urges not to pass license cancellation order
Telecom operator Aircel has asked the Supreme Court not to pass a proposed order cancelling its licences and selling its spectrum until it is heard, saying “incalculable damage” had already been done to its business.
The Chennai-based telecom services provider risks cancellation of its licences because representatives of its largest shareholder haven’t appeared in connection with a case filed by the Central Bureau of Investigation against former telecom minister Dayanidhi Maran.
Aircel said the company isn’t accused in the case against Maran and if the government takes coercive action before the next hearing on February 3, it could be “fatal” for the company.
“If the order is passed, it would result in closure of all operations,” Aircel explained in its plea to the court, seeking to be heard before any order is passed that may affect the company. “Any deprivation of spectrum would be a death knell for operations of the company.”
State Bank of India-led consortium of lenders had filed a plea to be heard in the case on Monday, on grounds of having substantial exposure via loans to Aircel. SC agreed on Tuesday, to hear them at the next hearing.
ET, which first reported on January 11 that Aircel is likely to move the top court against its proposed order, has seen a copy of the plea. Aircel declined to comment.
“Even the proposed order has caused incalculable damage to the business,” the company said.
Aircel’s filings follow those by State Bank of India and 11 other banks, which underscored the large debt the telco owes them and the large-scale impact that local and foreign lending agencies will face if the spectrum is taken away.
The trouble for Aircel began on January 6, when the Supreme Court threatened to cancel Aircel’s airwaves and licences if T Ananda Krishnan, promoter of Malaysia-based Maxis Communications Berhad, and former Maxis director Augustus Ralph Marshall did not to appear before a trial court to answer criminal charges filed against them. Maxis owns 74% of Aircel’s equity.
The court barred the transfer or sale of Aircel’s 2G airwaves, putting into jeopardy a plan by Aircel and Reliance Communications to merge their wireless businesses into one entity to be equally owned by their founders.
CBI had issued warrants against Krishnan and Marshall, besides companies Maxis Communications Berhad and Astro All Asia Networks. They were named in an October 2014 chargesheet against Maran who allegedly coerced Aircel promoter C Sivasankaran to sell his stake in the company to Maxis in 2006 as part of a quid pro quo in the form of bribes. Maran has denied the charges.
Malaysian media agencies published the Indian Supreme Court’s summons on Tuesday, as per its order of January 6, after Malaysia’s Attorney-General’s Chambers allegedly refused to serve the summons.
In its plea to the Supreme Court, Aircel said it has received any summons in the case and the company has no control over those accused. The telco argued that allegations of repatriation of profits or any money was untrue because Aircel has been a loss-making entity since it was acquired by Maxis in 2006.
The telco also said that at the court’s direction, the Department of Telecommunications prematurely asked Aircel’s customers to shift to other operators. While the court order caused uncertainty in the minds of customers, Aircel urged to be heard at the earliest, fearing that there may be no business left to hand over to any other telco.
Aircel said the allegation that its assets were being liquidated and funds moved out of India was false. Since acquiring Aircel, Maxis has pumped in Rs 32,000 crore in the company. The telco has also raised debt, which stood at Rs 16,821 crore as of December 2016, secured by assets and shares of the company. Proceeds from the sale of 4G spectrum to Airtel went to lenders to lower the outstanding debt.
Aircel said the company is not owned by any individual directly or indirectly and the apex court was being misled. The company said Global Communications Services Holdings Ltd., a Mauritius-based arm of Maxis, owned 73.99% in Aircel, while 26% was held by Sindya Securities and Investments.
Aircel said it has more than 8,000 employees and had an average turnover of Rs 11,236 crore in the past three years, with about 91 million subscribers across all 22 circles.
Aircel clarified that the proposed merger with RCom does not involve the sale of spectrum or cash and the company will give equity to acquire the wireless business of the Anil Ambani-owned company. Further, the deal with RCom is subject to approval by regulators including DoT and National Company Law Tribunal.
aircel urges not to pass license cancellation order, Telecom News, ET Telecom
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