C Sivasankaran, Founder of Aircel shares his take with CNBC-TV18 on the Supreme Court's decision today to restrain transfer of all 2G licenses of the company until T Ananda Krishnan, Owner of Maxis Group presents himself before the court.
A Supreme Court bench headed by Chief Justice JS Khehar today restrained transfer of 2G licences of telecom company Aircel. It also ordered Maxis Group owner Ananda Krishnan along with some other members of the company to make an appearance in the Apex Court on January 27, failing which the 2G licences granted to Aircel shall be seized.Speaking to CNBC-TV18 on the development, C Sivasankaran, Founder of Aircel said it is only fair that the Apex Court has directed the owners of Maxis Group to appear before it. He believes they may not eventually present themselves before the SC leading to all spectrum owned by Aircel being taken over the department of telecommunication.
Sivasankaran also pointed out the larger issues like payment that will be required to be made by Standard Chartered Bank that brokered the Aircel-Maxis deal to Indian banks which funded the company.
Below is the transcript of Chinnakannan Sivasankaran’s interview to Nisha Poddar and Kritika Saxena on CNBC-TV18.
Nisha: Your reactions on the Supreme Court’s ultimatum today to T Ananda Krishnan?
A: I am glad that Supreme Court ruled against the sale of Aircel and if you see what Supreme Court has said, it has very clearly requested that in the two weeks if Mr. Ananda Krishnan does not attend court that these 65 million subscribers will be transferred. And they have said that spectrum should not be sold. I heard your news that you are talking about the difference of 2G, 3G, 4G. In my view, because is do not have a good legal knowledge, what Supreme Court meant was that if the promoters or owners of Aircel does not attend court, that nothing in the share or the spectrum, then the customers has to be transferred to some other telecom. And I believe that in the two weeks or four weeks, those four people have no respect for law, so they will not come to India and ultimately, whatever the Supreme Court has ordered will happen and Department of Telecommunications (DoT) should play a role in that.
Kritika: I want to understand the point that you are making with repect to this sale or transfer of Aircel assets to specific companies. There is one deal with Bharti Airtel and one with Reliance Communications. So, what you are saying is that if the founder does not come in, if Mr Ananda Krishnan does not appear before the court, you believe that Supreme Court’s order will also pertain to these two companies regardless of the fact that the sale to Bharti Airtel is 4G and this is specifically a sale on the 2G spectrum?
A: The Supreme Court has very clearly said that if the accused, the four people do not present themselves to the court that the 65 million customers will be made alternative arrangement and all the frequencies will be taken over by DOT. But according to you, the merger can happen, but right now where we stand, this Reliance Communications will not get any frequency or the customers.
Kritika: Let me ask you also about the premise of the order. The premise of the order and direction to DOT is to ensure that Aircel’s value does not get diluted by spectrum sale. Now the point that the lawyers are essentially making is that Reliance Communication’s spectrum going into Aircel value will be enhanced.
A: I am not a lawyer. I am not interpreting the thing. Those are left to legal experts. I am a lay man. What the Supreme Court says is no foreign company can disobey the law and they can get benefit of the asset. The bottom is, who is the beneficiary of this assets. Mr Ananda Krishnan is a beneficiary of the assets. So, he cannot get any benefit. Let us understand the intention of the Supreme Court. The intention of the Supreme Court is to protect the law and wants to set as an example. I am very proud that Indian judiciary is very good and they made the intention very clear in the open court. It is not applicable only to Maxis. It is a warning to any other international companies also who will acquire an asset here and who will not listen to the laws of the land and violate it.
Kritika: Another point that the Supreme Court has made is that if Mr Ananda Krishnan does not appear and if this is carried out, in that case, they have also observed that the government has to take care of the employees. Can you take us through what can be?
A: Let us not cross the bridge before it comes.
Kritika: But, if there was to be an impact on the employees, what are the options before the employees in that case?
A: Please understand there are other larger issues.
A: State Bank of India has funded the company. There are nationalised banks involved and it is Standard Chartered Bank which has loaned, but they have got guarantees from Maxis and they have access to the personal deposits of Mr Ananda KrishnanAnanda Krishnan.
Kritika: What is the total guarantees?
A: We do not know. I am not running Aircel or neither am I a director of Aircel. All I am explaining to you at this point is that there are bigger issues. For example, Standard Chartered Bank acted as a broker for buying this company and they are aware of all the illegal transactions. So, they may have to take responsibility in making the payment to all the Indian banks. So Standard Chartered Bank should have a liability of about Rs 15,000 crore on this deal because they have to protect. They are the brokers for this deal, so they cannot wash their hands.
Nisha: So, obviously there are bigger issues like paying back to the lenders and also, what is the roadmap provided to the subscribers. You clearly said that the only remedy is that DOT should take over the company and what is the further remedy? You also say that they should give it to a stable telecom company? That is the comment that you made.
A: Yes, a stable telecom company can be Reliance Jio, Vodafone or Airtel. The DOT will decide by transferring process whoever wants the 65 million customers. And they will take the employees and they will take the frequencies. And whatever the money the DoT gets, they should tell the Supreme Court and Supreme Court will decide for whom this money will go. Maybe Supreme Court will decide that the money should go for Aircel.
Kritika: The point that you were making earlier, you were talking about the liabilities. So, Rs 15,000 crore you said was for Standard Chartered. What are the other numbers as far as liabilities are concerned?
A: The Standard Chartered should take the responsibility because they did this deal. So, they should pay to State Bank and all other banks.
Kritika: What are the other liabilities?
A: I would guess it is about Rs 15,000 crore because I am not running Aircel. All I am saying is the Standard Chartered Bank and Maxis was party to an illegal transaction. They forced me to sell and they should come and answer the questions.