ICICI bank sees the "possibility" of losing a case filed by the resolution professional (RP) of Anil Ambani’s bankrupt telecom company, Reliance Communication, for alleged preferential payment of Rs 210 crore received by the private lender as repayment of debt.
“As per the opinion letter obtained by the external counsel, the likelihood of the claim Rs 210 crore succeeding against ICICI Bank in this matter is classified as “possible,” the Indian lender told USA's Securities Exchange Commission (SEC).
Legally, a case classified as "possible" means having a probability or moderate chance of future event or events occurring. It is a legal terminology often used by company to classify the risk. Other two classification included probable (if there is high chances to occur) and remote (if chances are slight or low).
An email sent to ICICI spokesperson on Saturday evening remained unanswered. The RP cited confidentiality issues and denied to disclose the details of the case.
The National Company Law Tribunal (NCLT) in 2019 appointed Deloitte’s Anish Niranjan Nanavaty as the RP for Reliance Communication in the insolvency resolution process for the telecom company under Insolvency and Bankruptcy Code.
According to the SEC filing of ICICI bank, Nanavaty has filed a miscellaneous application in January against the Bank at NCLT in Mumbai alleging preferential payments amounting to Rs 210 crore, made by Reliance Communications to ICICI Bank as repayment of debt incurred, and sought refund of said amount. Business Standard has reviewed the SEC disclosures.
ICICI Bank said subsequent NCLT hearings in the matter have been postponed due to the Covid-19 related restrictions
According to Reliance Communication's own admission, financial creditors have made claims worth Rs 57,382 crore from the company and its two subsidiaries as of June 16, 2019. Of this over Rs 7,000 crore are from group companies themselves and over Rs 47,000 crore are from 53 banks including Rs 14,775 crore from Chinese lenders.
ICICI Bank, while summarising the litigations, said at year-end fiscal 2020, there were 94 ongoing litigations (including those where the likelihood of our incurring liability is assessed as “probable”, “possible” and “remote”), each involving a claim of Rs 1 crore or more against us, with an aggregate amount of approximately Rs 80,600 crore (to the extent quantifiable and including amounts claimed jointly and severally from us and other parties).
"Despite our best efforts at regulatory compliance and internal controls, we, or our employees, may from time to time, and as is common in the financial services industry, be the subject of confidential enquiries, examinations or investigations that might, or might not, lead to proceedings against us or our employees. In any such situation it is our policy to conduct an internal enquiry, co-operate with the regulatory authorities and, where appropriate, suspend or discipline employees, including terminating their services,” it said.