Ericsson case against RCom: Anil Ambani appears before SC over non-payment of Rs 550 crore
BusinessToday.In February 12, 2019
Reliance Communication (RCom) Chairman Anil Ambani appeared before the Supreme Court on Tuesday in a contempt plea filed by the Swedish telecom equipment maker Ericsson India over non-payment of dues worth over Rs 550 crore. This is Ericsson India's second contempt plea against the Anil Ambani company, which filed for bankruptcy before the National Company Law Tribunal (NCLT) on January 3. Before this, RCom had failed to comply with the Supreme Court December-15 deadline on the payment of dues. The apex court had warned RCom would have to pay 12 per cent interest per annum if it failed to comply with the order.
Senior advocates Kapil Sibal and Mukul Rohatgi, who appeared for RCom, requested Ericsson counsel to accept Rs 118 crore of the total amount, but the proposal was declined, as reported by The Indian Express. The Supreme Court later asked RCom to deposit a demand draft worth Rs 118 crore in the registry.
Ambani had previously given a personal guarantee in the court, backing a prompt payment of Rs 550 crore to Ericsson. In 2018, RCom had managed to avert three insolvency petitions filed by Swedish networking company Ericsson, citing strategic debt restructuring plan as per which it was supposed to sell assets worth over Rs 25,000 crore to Mukesh Ambani-led Reliance Jio. But, the deal failed to fructify due to a delay in approval from the Department of Telecom (DoT).
Thereafter, RCom filed a contempt of court plea against DoT in the apex court, blaming it for delaying the RCom-Jio deal that would have enabled it to meet its debt obligations to Ericsson as well as other lenders. After failing to cope with the overall pressure to reach a consensus on the asset sale with 40 of its lenders, RCom decided to move the NCLT for resolution.
Adding to its woes, lenders last week resorted to panic selling of shares in four Reliance Group companies, including Reliance Capital, Reliance Communications, Reliance Infrastructure and Reliance Power. This has also led to the promoter's stake in Reliance Communications and Reliance Capital slipping below 50 per cent.