UBI's action to identify loan accounts as 'fraudulent' not legally tenable: Reliance Communication
Reliance Communications has said that any action taken by the Union Bank of India for initiation of any proceedings to identify the bankrupt telco's loan accounts as fraudulent is not legally tenable since the company is undergoing the corporate insolvency resolution.
In a filing to the Bombay Stock Exchange on Thursday, Rcom also pointed out that the query regarding irregularities in the bank accounts as mentioned by the Union Bank of India relate to transactions between April 1, 2013 and March 31, 2017, which is prior to the date of initiation of insolvency proceedings, and hence the resolution professional is not obligated to respond to the same.
«The bank may note that specifically in light of Section 14(1)(a) of the Code, on account of the prevailing moratorium, there exists a prohibition on inter alia the institution/continuation of any suits/ proceedings against the Corporate Debtor (Rcom), including the execution of any judgement, decree or order in any court of law, tribunal, arbitration panel or other authority,» the telco wrote in its letter to the Union Bank.
Under insolvency proceedings, RCom is currently being run by resolution professional Anish Nanavaty, who wrote the letter on behalf of the company.
On August 7, the bank had written to the director of Rcom asking for the telco's views on the irregularities found in two loan accounts — account number 4958063900002088 and account number 495806390002240 — and gave Rcom 15 days to respond to the same.
In its letter, Union Bank of India had said that through a forensic audit carried out in 2020 «certain serious irregularities/anomalies/commissions/omissions have been pointed out by the Auditors which needs to be examined by the Competent Authority to
