The National Company Law Tribunal has admitted a petition filed by Sony Pictures Networks India Ltd against cable and broadband operator Ortel Communications.
The petition, under Section 9 of the Insolvency and Bankruptcy Code of India, was for initiating insolvency proceedings against the cash-strapped cable and broadband operator.
The NCLT also appointed an interim resolution professional, who leads the resolution process, in its proceedings yesterday, the Odisha-based company informed.
It is common for vendors and suppliers to move the NCLT when their customers can or will no longer pay their dues.
Sony had filed the petition in September, claiming that Ortel owed it Rs 12 crore. This came two months after the companies had a public falling out over demands by Sony for higher payments for its channels.
Sony had also filed a police complaint in Odisha, claiming that Ortel was continuing to distribute its channels without a valid agreement.
Ortel Communications, one of India’s biggest cable operators by number of direct customers, has been reporting losses due to a sharp decline in its revenue.
Part of the reason has been the rising popularity of low-cost wireless broadband services based on 4G technologies, which has lured customers away from wired broadband services like cable.― Ultra News