Shares of Indian telecom company Reliance Communications Ltd plunged as much as 13 percent on Wednesday after the Economic Times reported that Department of Telecommunications (DoT) rejected a proposed spectrum sale to Reliance Jio Infocomm Ltd. The RCom stock closed 9.52% lower at ₹ 14.25 per share on NSE. Intraday, RCom shares fell as much as 13.33% to ₹ 13.65 per share.
The DoT rejected the deal to trade airwaves as it did not conform to its guidelines, the paper said, adding that as per the trading norms, the buyer is liable for dues that are not recovered from the seller.
Jio informed the DoT that it won’t be held liable for RCom’s past dues related to airwaves, according to the report.
The DoT move comes as a surprise as the it was widely expected to approve the transaction, though a day later than the original timeline due to last-minute paperwork, ET reported on Tuesday.
The transaction was key to the debt-laden telecom operator’s restructuring plan, announced earlier this year, which entailed the sale of telecom assets such as towers and airwaves to Jio.
The plan to sell the assets had followed a settlement with telecom gearmaker Ericsson for partial payment of dues owed by RCom to the Swedish company.
The companies were not immediately available for comment, while the DoT could not be immediately reached for comment.
(Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in the Bombay high court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.)