AGR Case: Supreme Court asks Rcom to explain fall in asset valuation from Rs 35,000 crore to Rs 5,304 crore

The Supreme Court on Monday asked Reliance Communications (RCom) to explain the fall in the value of its assets, even as the government stressed that airwaves of all telcos, including that of bankrupt companies like RCom, belong to the government.
The top court directed RCom's legal representative to explain how the RCom and its units - Reliance Telecom and Reliance Infratel's - value eroded from Rs 35,000 crore in 2019 to Rs 5,304 crore as on date of liquidation with a fair value around Rs 10,000 crore.

RCom under a debt of Rs 46,000 crore went bankrupt in 2019. The SC bench has been checking if telcos had filed for insolvency to evade paying AGR dues. RCom, for example, owes Rs 31,000 crore to the DoT as AGR dues. The telco , in the last leg of insolvency, is now awaiting SC's call on spectrum ownership , which if handed over to the telecom department, will push the operator towards liquidation.

On Monday, Reliance Jio Infocomm, via an affidavit, informed the SC that it is not liable for Rcom's AGR dues. The largest telco has said that AGR dues arise out of revenue from customers and sharing spectrum does not make the telco liable for the contested statutory dues.

But SC on Monday has asked the government to clarify its stance on spectrum shared and traded between Rcom and Jio.

"Can Jio be held liable when they are generating revenue from shared spectrum? We want Govt's position on Jio sharing Rcom spectrum, on Jio discharging R.Comm spectrum dues," observed the SC bench, headed by Justice Arun Mishra.

According to legal sources, Jio's affidavit clarificlarified that the telecom department did not demand any AGR dues from the Mukesh Ambani-led telco, for its spectrum sharing and trading agreements with RCom.

SC had observed last week that Jio must pay a part of RCom’ AGR dues since it was using the latter’s spectrum since 2016.

Jio in its affidavit had said that it was paying its spectrum usage charges and AGR was calculated on basis of revenue earned and therefore RCom's AGR not the liability of Jio.