Reliance Communications urges lenders to release Rs 260 cr to Ericssonhttps://indianexpress.com/article/business/reliance-communications-urges-lenders-to-release-rs-260-crore-to-ericsson-5594381/

Reliance Communications urges lenders to release Rs 260 cr to Ericsson

"RCom is confident of raising the balance approx Rs 200 crore for payment to Ericsson, in order that the entire Rs 550 crore plus interest thereon stands paid to Ericsson well within the time of 4 weeks allowed by the Hon’ble Supreme Court," the spokesperson said.

Reliance Communications urges lenders to release Rs 260 crore to Ericsson
The Supreme Court said Reliance Communications chairman Anil Ambani would face three months jail if its orders were not followed. (Reuters)

Reliance Communications Ltd (RCom) on Thursday urged lenders to permit the release of Rs 260 crore it had received in Income Tax returns to pay Swedish telecom giant Ericsson.

This request comes a day after the Supreme Court held RCom chairman Anil Ambani guilty of contempt of court for not honouring an undertaking to pay Rs 550 crore in dues to Ericsson India Ltd.

In a media statement, RCom’s spokesperson said: “Reliance Communications group has requested urgent approval from its lenders to release approx Rs 260 crore received from Income Tax refunds, lying in its bank account, directly to Ericsson. A sum of Rs 118 crore has already been deposited with the Hon’ble Supreme Court.”

He further said, “RCom is confident of raising the balance approx Rs 200 crore for payment to Ericsson, in order that the entire Rs 550 crore plus interest thereon stands paid to Ericsson well within the time of 4 weeks allowed by the Hon’ble Supreme Court.”

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Explaining what the Apex court ordered, the spokesperson said: “RCom chairman Anil Ambani was found guilty of contempt of court for willfully defaulting on payment of Rs 550 crore to Ericsson. The apex court had directed Ambani to pay Rs 453 crore to the telecom equipment maker and warned he would face three months jail if he fails to comply with its order.”

Also Read | What is the contempt case against Anil Ambani’s Reliance Communications?

The matter relates to undertakings given to the National Company Law Appellate Tribunal (NCLAT), and subsequently to the Supreme Court, by RCom companies saying that they would pay Rs 550 crore to Ericsson to settle the Swiss giant’s dues.

A apex court bench, consisting of Justices R F Nariman and Vineet Saran, slammed the RCom chief’s “cavalier attitude…to the highest court of the land” and also held the chairpersons of Reliance Telecom Ltd and Reliance Infratel Ltd guilty of contempt.

The Supreme Court asked the three companies to pay Rs 453 crore to Ericsson within four weeks, failing which the three would have to undergo imprisonment of three months. It directed the Registry to transfer the Rs 118 crore already deposited in court to Ericsson within one week.

The Court also asked the three companies to pay a fine of Rs 1 crore each to the Registry within one week failing which the three chairpersons will have to serve one month in prison.

“This sum will be paid over to the Supreme Court Legal Services Committee,” the Court said.

According to case records, Ericsson entered into a Managed Service Agreement with RCom in January 2013 under which it agreed to provide managed services – operation, maintenance, and management of RCom’s network. The arrangement ran into problems and the deal was terminated in September 2017. The matter reached the National Company Law Tribunal and NCLAT where the two sides struck a deal to settle their dues.