Amid a proxy war between the two Ambani brothers over control of Rs 90,000 crore Reliance empire, the Mukesh Ambani-controlled Reliance Infocomm on Sunday said it had invested over Rs 14,000 crore towards rolling out its information and communication infrastructure, and dismissed allegations of huge bad debt.

"The canard that the entire amount of Rs 3,500 crore has become a bad debt is part of a sustained vilification campaign against Reliance Infocomm and Reliance Industries Ltd and its chairman Mukesh Ambani," a Reliance Infocomm spokesman told PTI.

Responding to queries, he said over Rs 2,000 crore, around 60% of the receivable against the total amount of Rs 3,500 crore due against Reliance handsets and various plans, has already been recovered. He admitted that activities pertaining to handsets, marketing, billing and collections, handled by Reliance Industries were shifted to Smart Entrepreneurs Solutions, an entity controlled by Reliance Communications Infrastructure Ltd in March 2004.

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Commenting on reports of RIL's refusal to take the receivables of Reliance Infocomm on its book and subsequent transfer of the amount to another company, the spokesman said, "The new set of fabrication floated by vested interests includes the baseless allegation that the bad debts have been parked in a group company, Smart Entrepreneurs, and license fees is not paid commensurate with revenues."

The amount of Rs 3,500 crore is not a 'bad debt at all', he said adding it represented amounts receivable from subscribers over a period of time towards handsets and plan charges under various schemes.

The handsets were purchased and provided by RIL and therefore 'there is no question of clubbing dues of handsets to RIL with the service revenues due to Reliance Infocomm', he clarified.

"Consequently, these receivables were transferred from the book of Reliance Industries to Smart Entrepreneurs. Since then, over Rs 2,000 crore of the amount has been received," he said adding the remaining amount would become due on a monthly basis from subscribers over the next 30 months and the same was being received.

The spokesman, however, did not elaborate on reasons for shifting activities from RIL to Smart Entrepreneurs or reply to queries whether the move resulted from RIL vice-chairman Anil Ambani's stand that receivables could not be put on the books of the flagship company Reliance Industries.

Detailing financial performance of Reliance Infocomm during 2003-04, the spokesman said, "The company's investment in fixed assets, including capital work in progress, net current assets and loss of Rs 380 crore result in application of funds to the tune of Rs 14,100 crore."

The company posted service revenues of Rs 2,707 crore and loss after depreciation was Rs 390 crore. The debtors as on March 31, 2004 were 838 crore while loans and advances were Rs 3,739 crore.

"It is unfortunate that a deliberate campaign has been unleashed to malign an initiative that aims to help India attain leadership through the convergence of IT and communications in the knowledge age," the spokesman said.

He asserted nowhere in the world has been a 60,000km network, covering thousands of cities with high-capacity fibre cables, completed in a record time of 36 months and claimed, "Very soon, Reliance Infocomm would be bringing about a broadband revolution in the country."