Four financial institutions, including two Chinese banks, have written to finance minister Nirmala Sitharaman and the Insolvency and Bankruptcy Board of India (IBBI) seeking their intervention to speed up the resolution process of Reliance Infratel (RITL), the tower arm of Reliance Communications.

China Development Bank, Export Import Bank of China, Shubh Holdings Pte and SC Lowy Asset Management are the signatories to the letter.

Highlighting the roadblocks faced by them and other instances like successful resolution applicants reneging on their plans, these institutions have urged the ministry of corporate affairs and IBBI to consider appropriate legislative amendments to the Insolvency and Bankruptcy Code (IBC) so that successful applicants are disincentivised from withdrawing or modifying their resolution plans.

RITL owes these financial institutions a total of Rs 13,483 crore out of its total debt of Rs 41,055 crore.

According to these entities, Reliance Projects and Properties Management Services, an affiliate of Mukesh Ambani’s Reliance Jio Infocomm, had won the mandate to takeover RITL’s assets for Rs 4,400 crore, but is yet to implement the resolution plan.

“Allegedly, this is because it has not been provided with a copy of the forensic audit report. However, Reliance Projects enjoys the complete use of the towers of RITL at a significantly discounted price. Given this usage, RITL’s committee of creditors (CoC) continue to incur losses for the maintenance of these towers at Rs 30-40 crore per month,” the letter said.

In May 2018, Indian lenders of Reliance Communications (RCom), then controlled by Anil Ambani, referred the firm and its subsidiaries (RITL and Reliance Telecom) to the National Company Law Tribunal (NCLT), after it failed to pay dues worth Rs 46,000 crore. While UVARC had won the process to acquire RCom in March 2020, Reliance Projects emerged as the winner for RITL.

Later in November 2020, the process came to a halt after State Bank of India, Union Bank of India and Indian Overseas Bank tagged RITL as a “fraud account” after a forensic audit.

In May 2021, Reliance Projects moved NCLT asking it to direct RITL lenders to share the forensic audit. According to the petition, terming the accounts as fraudulent was not disclosed before NCLT. Later, the banks withdrew the fraudulent tag, but the copy of the report not provided to Reliance Projects.

The foreign firms want the finance ministry and bankruptcy board to request the NCLT to direct Reliance Projects to implement the resolution process on an “urgent basis”.

“…there is no legal rationale on the basis of which Reliance Projects may further withhold the implementation of the resolution plan”.

Supporting their request, the Chinese banks reiterated in the letter that Reliance Projects will be acquiring RITL on a “clean slate basis” (not be liable for earlier offences), while the Indian banks have confirmed to withdraw the fraud tag, if the resolution plan was implemented.

During the past three years (since the start of the asset monetisation process in 2017-18), the assets of RITL, RCom and Reliance Telecom have been devalued “significantly”. If the implementation of the resolution plan (which was approved by NCLT) is further delayed, it will prejudice recovery for all creditors, it added.

While the matter is pending before the NCLT, the tribunal has not heard Reliance Projects’ application after June 10, 2021, the firms said.