Investors Oppose RCom’s Plea Urging Lenders to Pay Rs. 260 Crores Out of Total Dues Amounting Rs. 453 Crores to be Paid to Ericsson



Investors Oppose RCom’s Plea Urging Lenders to Pay Rs. 260 Crores Out of Total Dues Amounting Rs. 453 Crores to be Paid to Ericsson

New Delhi: On Wednesday, February 27, financial creditors opposed the plea filed by debt-ridden Anil Ambani led Reliance Communications, requesting its creditors to release Income Tax refund amounting Rs. 260 directly to telecom equipment maker Ericsson.

The matter was heard before a two-member NCLAT bench headed by by Justice S J Mukhopadhaya, who instructed the financial creditors including the State Bank of India to file its response before the Tribunal by March 8 and has listed the matter for further hearing on March 11.

During the hearing, Senior Advocate Krishnan Venugopal, representing the financial organisations including State Bank of India, contested the plea claiming the Tribunal is not an appropriate forum to decide the issue. The Supreme Court has already considered the issue. The sum has to come independently.

Earlier on February 4, the NCLAT ordered:

“Until further orders, the Appellants, corporate debtor RCom, Respondent (Ericsson India), guarantors or any third party will not sell, transfer or alienate any moveable or immoveable property of RCom nor invoke any guarantee or mortgage or any other instrument without prior permission.”

In August last year, Reliance was ordered to make a payment of Rs. 550 crores to Ericsson on or before September 30. Subsequently, RCom sought extension, whereby the apex Court granting one last opportunity permitted Reliance to make the payment along with interest by December 15. On December 14, the Telecom major once again moved the Court seeking an extension. However, was later withdraw upon realising that the Court would not entertain the plea any further.

Thereafter, Ericsson moved the Court initiating three contempt petitions against Anil Ambani, Reliance telecom chairman Satish Seth and Reliance Infratel chairperson Chhaya Virani for non-clearance of its dues. During the hearing, the Court had observed that although RCom and Ericsson had entered into an unconditional undertaking, the Telecom major falsely portrayed the undertaking to be conditional before the Court.

On February 20, Reliance Communications, its Chairman and two more directors were held in contempt and subsequently, instructed to pay Ericsson towards settlement of dues Rs. 453 crore within four weeks. It is pertinent to not that the payment to be made was in addition to the Rs. 118 crore which Reliance had undertaken to deposit with the Court Registry. In case, RCom fails to comply with the Court order within the given time period, Anil Ambani and the chairmen of RCom units Reliance Infratel and Reliance Telecom Chhaya Virani and Satish Seth shall be liable for a jail term of three months, exclaimed the bench.

Subsequently, on February 21, the Supreme Court heard an application filed by the Anil Ambani led Reliance Communications, requesting its creditors to release Income Tax refund amounting Rs. 260 directly to telecom equipment maker Ericsson. During the hearing, representing Reliance, Senior Advocate Kapil Sibbal assured the Court that once the lenders make the desired payments, the remaining Rs. 200 crores as part of the order shall be arranged by the RComwithin stipulated time frame.

Anil Ambani
Essar Group
National Company Law Tribunal (NCLT)
RCom

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