RCom pays Rs462 cr to Sweden's Ericsson ahead of SC deadline
18 Mar 2019
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Reliance Communications has paid Swedish telecom equipment manufacturer Ericsson Rs462 crore ahead of the deadline fixed by the Supreme Court thereby averting certain imprisonment of its chairman Anil Ambani.
Ericsson's lawyer and the company’s spokesperson are reported to have confirmed receipt of the payment.
The Supreme Court had held Ambani and three Reliance companies guilty of contempt of court for not complying with the undertaking to settle the Rs550 crore dues of Ericsson.
The bench of Justices R F Nariman and Vineet Saran had ordered Anil Ambani’s RCom and two of its directors to pay Ericsson Rs450 crore within four weeks or face a three-month jail term for contempt of court.
RCom had already deposited Rs118 crore in the court as advance payment against its dues to Ericsson.
RCom owed a total Rs571 crore to Ericsson in contract payment, which included a one-time settlement of Rs550 crore and interest payment of Rs21 crore.
The Swedish gear-maker had initiated insolvency process against RCom as an operational creditor. On 30 May 2018, the NCLAT directed Reliance to pay Rs550 crore to Ericsson on the basis of a settlement between both the companies. This was defaulted and the matter reached the Supreme Court, where RCom undertook to pay the amount. But the undertaking was not honoured, forcing Ericsson file a contempt petition, alleging that Reliance group "wilfully and consciously" defied the order dated 3 August of the top court and the undertaking given before it to pay up by September-end.
The apex court had on 23 October given one last opportunity to RCom for clearing the settlement amount, by setting 15 December. When this deadline was also missed, the SC issued contempt notice to Ambani on 6 January. The bench was not prepared to accept the offer of part-settlement made by RCom for Rs118 crores.
Last week, Reliance had approached the National Company Law Appellate Tribunal seeking a direction to State Bank of India to release the amount of Rs.260 crores of income tax refund held by it in trust on behalf of all creditors of Reliance Communications(RCom) to enable the telecom company to pay Rs.450 crores to Ericsson India Private Ltd.
In the judgment pronounced on Friday, the NCLAT noted that that the payment of dues of Rs550 crore to Ericsson by three Reliance Companies is not linked with the assets of the SBI or any other bank, who are third parties to the settlement between the three Reliance companies and Ericsson.
