5 September 2019: Telecom equipment maker Ericsson has said Reliance Communications’ resolution professional has no right to seek a refund of Rs 576.77 crore paid to the Swedish company under the Supreme Court’s directions.
“Without prejudice to our rights and before we respond to your communication dated 23.08.2019, at the outset, we deny the right of resolution professional to seek refund of the amount paid to Ericsson in furtherance to the orders… passed by the… Supreme Court of India,” Ericsson said in a letter dated September 4.
In the letter, which ET reviewed, Ericsson sought to know under what provisions the refund was sought. It asked for copies of the minutes of meetings held by the telco’s committee of creditors, a list of financial and operational creditors who attended the meetings where the refund was discussed, copies of the tribunal order appointing Deloitte as the resolution professional, and any applications filed by financial and operational creditors.
Ericsson’s legal representative, senior advocate Anil Kher, confirmed the contents of the letter.
Deloitte sought the refund, saying the Swedish company had to be treated at par with other operational creditors and that the insolvency resolution process that Ericsson had initiated against RCom had resumed.
Ericsson petitioned for RCom’s bankruptcy in September 2017 over non-payment of dues worth over Rs 1,500 crore. The bankruptcy court admitted the petition but, under RCom’s appeal, the National Company Law Appellate Tribunal stayed the order and a settlement was chalked out with Ericsson.
However, RCom failed to pay the settlement amount of Rs 550 crore and the matter went to the apex court, under whose direction it was finally settled in March 2019, when the telco paid the amount with interest to Ericsson to save chairman Anil Ambani from being jailed for contempt.
The queue of operational creditors includes tower companies, equipment vendors and the Department of Telecommunications. Ericsson’s stand may force RCom and its units to approach the appellate tribunal. The battle may eventually head to the Supreme Court, experts said.