Reliance Communications has asked Ericsson to refund Rs 579.74 crore that the bankrupt telco had paid it, saying the Swedish telecom equipment maker had to be treated on a par with other operational creditors. It also said the money paid must be returned because the insolvency resolution process that Ericsson had initiated against RCom had resumed.
The demand may resurrect a legal battle and delay the insolvency process, given that the payment by RCom was made on Supreme Court’s directions.
“Ericsson should not be allowed treatment which is any different than the treatment that shall be accorded to the other operational creditors… either in terms of a resolution plan subsequently approved, or, in the event of liquidation,” Deloitte, the resolution professional overseeing the telco’s affairs, said in a letter to Ericsson last week. ET has reviewed a copy of the letter. “Ericsson is requested to hereby initiate a refund of the total sum of the monies received by it,” the RP said in the letter.
Ericsson may Seek Minutes of CoC Meeting
The letter requires Ericsson to join the queue of operational creditors including tower companies, equipment vendors and the Department of Telecommunications, which have claimed Rs 88,000 crore in dues, of which over Rs 70,000 crore had been verified.
According to the company’s lenders, payment to an operational creditor, in this case Ericsson, made while RCom is in insolvency is against the Insolvency and Bankruptcy Code. Financial lenders including State Bank of India, China Development Bank, Standard Chartered Bank, Deutsche Bank and DBS Bank, which have raised claims of up to Rs 57,382 crore, of which Rs 49,223.88 crore had been verified, get preference over operational creditors upon resolution.
Ericsson plans to ask the RP to send the minutes of the Committee of Creditors meeting that passed the resolution demanding the refund, according to people aware of the development. The company will then take a call on approaching the Supreme Court, which decided on the matter in February.
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 insolvency order and a settlement with Ericsson was chalked out.
