The Supreme Court has allowed Spice Communications to withdraw $13 million from its bank accounts for part payment of dues to equipment vendor Siemens Aktiengesellschaft.
The move had been challenged by Distacom, which holds 49 per cent stake in Spice, in the Delhi high court accusing the BK Modi-promoted Mcorp Global and Siemens Aktiengesellschaft of attempting to withdraw the money from the joint venture's bank accounts without board approval. Distacom had also written to the Deutsche Bank objecting to the release of funds.
In response to Spice's petition, the SC said the money would be brought back if the Delhi high court, where the case was pending, so desired. Following the SC order, Spice is expected to deposit the amount before the month-end.
The ruling also stipulates that M Corp Global give a day's notice to Distacom on the amount intended to be withdrawn. It has also asked the Modi Group to file an affidavit with the HC stating the exact amount withdrawn along with other particulars.
A Distacom spokesperson said, "The Modi group, while purporting to represent Spice, was acting against the interests of the company."
The issue dates back to 1996, when Siemens Aktiengesellschaft had entered into a contract with Spice to supply telecom hardware.
Siemens had provided credit support for long-term banking facilities undertaken. Distacom, as one of the guarantors to this deal, had pledged 9.8 per cent of its stake in Spice to Siemens.
Spice and Siemens have been involved in a series of legal battles since 2002 as the former defaulted on payments. Appeals by both the parties are pending in the Delhi HC.