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RCom completes Rs 580 crore payment to Ericsson as Ambani evades jail term

PW Bureau

Swedish telecom equipment manufacturer’s lawyer confirmed the receipt of the payment from RCom, bringing an end to the year-long legal battle between the two companies New Delhi: Possibly staving off a jail term for billionaire Anil Ambani and two Reliance Communications Ltd (RCom) directors, Ericsson said on Monday it has obtained its dues of Rs 462 crore from the telecoms firm. The Swedish telecom equipment manufacturer’s lawyer confirmed the receipt of the payment from RCom, bringing an end to the year-long legal battle between the two companies. March 19 was the final day to pay the dues, which comprised penalty interests, according to the Supreme Court’s orders.

Ambani was in contempt of court

Last month, the SC had held Ambani in contempt for not paying Ericsson’s dues even though he had enough money to pay it off. The apex court threatened to send Ambani, along with the chairmen of Reliance Telecom and Reliance Infratel— Satish Seth and Chhaya Virani— to pay the dues within four weeks or face a three-month prison sentence for contempt of court.

Ericsson moved a bankruptcy court in 2017

After signing a seven-year contract in 2013 to manage and run the RCom’s nationwide network, the Swedish firm first moved a bankruptcy court in 2017, alleging that it had unpaid dues of approximately Rs 1,500 crore. The case moved from the National Company Law Tribunal (NCLT) to the National Company Law Appellate Tribunal (NCLAT) and then to the SC. To repay its lenders and creditors including Ericsson, RCom, with a debt of Rs 46,000 crore, was close to using some of the proceeds earned from selling its assets to Reliance Jio Infocomm (Jio) and Canadian asset management company Brookfield.