RCom in a fix as NCLAT refuses to direct SBI to release funds

SC had asked Reliance Communications to pay Ericsson’s dues within four weeks

The National Company Law Appellate Tribunal (NCLAT) on Friday refused to direct the SBI to release ₹259 crore to the Reliance Communications Group.

On February 20, the Supreme Court had directed RCom to pay its dues to Ericsson India Pvt. Ltd. within four weeks, failing which its chairman Anil Ambani could face a three-month jail term.

In the meantime, RCom received ₹259.22 crore as income tax refunds for the financial year 2015-16, which is lying in three Trust and Retention Accounts (TRAs) with SBI. RCom Group companies — Reliance Infratel Ltd., Reliance Telecom Ltd. and Reliance Communications Ltd. — then moved the tribunal, seeking a direction to SBI to release the money in order to make the payment to Ericsson India. RCom Group had contended that there were no monies held outside the three TRAs and the funds lying in it were the only amounts available to pay Ericsson India.

However, the tribunal, on Friday, refused to provide any relief to RCom, but said that it could move the Supreme Court.

On May 30 last year, the tribunal had directed the RCom Group to pay a total sum of ₹550 crore in favour of Ericsson India by September 30, 2018. This deadline was subsequently extended by the SC.

On February 20, the SC, while directing RCom Group to pay the dues, also directed its registry to release ₹118 crore deposited by RCom Group for payment in favour of Ericsson India. In this backdrop, RCom Group was allowed to pay a further sum of ₹453 crore within four weeks to Ericsson India.

Source: Read Full Article