Reliance Communications said on Sunday that its lenders had rejected the resignations of Chairperson Anil Ambani and four other directors from the board. Ambani and four other directors – Chhaya Virani, Ryna Karani, Manjari Kacker and Suresh Rangachar – had quit their posts earlier this month.
However, the company’s statement, made in a BSE filing, did not mention Chief Financial Officer Manikantan V, who had also resigned from his post.
Reliance Communications said that its Committee of Creditors had considered the resignations of the five directors in its November 20 meeting, and had rejected them. The committee has also ordered that the directors be asked to resume their responsibilities and “provide all cooperation in the corporate insolvency resolution process”, at least until the conclusion of the process, the firm said.
A company’s financial and operational creditors can initiate the insolvency process by submitting an application to the National Company Law Tribunal under the provisions of the Insolvency and Bankruptcy Act, 2016. The debtor, that is the firm itself, can also make the application. In February, Reliance Communications had filed for bankruptcy after failing to sell its assets to pay off debt.
The matter so far
On November 15, Reliance Communications posted a consolidated net loss of Rs 30,158 crore in the July to September quarter. It is the second-highest quarterly loss posted by an Indian company till date, The Times of India reported. The company had made a loss of Rs 366 crore in the same period last year.
Reliance Communications’ huge net loss is the result of Rs 28,314 crore being set aside as provisions for liabilities following an adverse Supreme Court judgement last month that upheld the Centre’s broader definition of revenue. The government calculates levies on telecom operators on the basis of this definition. In its order, the top court excluded revenue from non-core telecom operations such as rent, dividend and interest income in the reporting of financial results. The court rejected the definition of adjusted gross revenue that telecom operators had proposed.