(Bloomberg) -- Billionaire Mukesh Ambani's prospects for bailing out his younger brother's phone company are fading after an Indian tribunal put his sibling's Reliance Communications Ltd. into insolvency proceedings, which prohibit “connected persons” from acquiring assets of delinquent borrowers.
Ambani is India's richest man and the founder of upstart rival Reliance Jio Infocomm Ltd., which had agreed in December to pay about $3.7 billion for airwaves, towers and fiber assets of the company known as RCom. Insolvency administrators will now oversee disposal of RCom assets under rules that could bar him from bidding for them.
As the siblings are majority shareholders and part of management at their respective companies, a bid by Jio may be ineligible, said Shahezad Kazi, a lawyer with Mumbai-based S&R Associates.
There might be some wriggle room. A bid by an entity in which Jio has a minority interest may be legal under the rules, Kazi said.
Jio didn't immediately respond to a request for comment.
RCom will decide on its course of action after the entire court order is available, it said in an exchange filing Tuesday.
Read here about RCom's decade-long road to sell assets and pare debt
To contact the reporter on this story: Bhuma Shrivastava in Mumbai at bshrivastav1@bloomberg.net.
To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net, Dave McCombs
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