Recovering dues from bankrupt telcos to be tough for government

NEW DELHI/MUMBAI: Given that the government classified as an operational creditor in the bankruptcy proceedings of Reliance Communications Ltd (RCom), Aircel Group and Videocon Communications Ltd, legal experts believe that the Centre may find it tough to recover regulatory dues, including adjusted gross revenues (AGR), from these telecom firms.

Under the Insolvency and Bankruptcy Code (IBC), financial creditors typically have a greater right on recovery proceeds, and the department of telecommunications (DoT) does not fall under the definition of a financial creditor as per law, which means that it may recover little or next to nothing from the resolution processes.

RCom owes the telecom department ₹25,199 crore, including spectrum usage charges and licence fees, according to government estimates. This is nearly half of ₹49,054 crore in dues calculated under the company’s insolvency proceedings. Aircel owes ₹12,389 crore to the DoT.