Ericsson keeps pressure on RCOM after cellco misses deadline

20 Dec 2018

Swedish vendor Ericsson has confirmed that it is continuing to pursue legal action against debt-ridden cellco Reliance Communications (RCOM) after the latter missed a court-ordered deadline to pay dues of INR5.5 billion (USD78 million). The Economic Times quotes the firm’s legal representative Anil Kher as saying: ‘We are going ahead with the revival of the earlier contempt petition as well as filing a new contempt petition against [RCOM Chairman] Anil Ambani because he failed to abide by the directions of the Supreme Court’. RCOM was due to submit the agreed payment by 30 September this year or face the reopening of insolvency proceedings. This deadline was missed but the apex court granted RCOM an extension until 15 December, although that deadline has now also passed.

According to the Economic Times, the National Company Law Appellate Tribunal (NCLAT) heard the case earlier this week, during which RCOM claimed it was unable to pay due to delays in completing the sale of spectrum to Reliance Jio Infocomm (Jio). Ericsson, however, had pointed out that the RCOM agreement had been made without conditions. The NCLAT warned that the asset sales already completed by RCOM could be reversed if the cellco is dragged back into bankruptcy proceedings. The NCLAT hearing is due to resume on 22 January 2019 but the Supreme Court is expected to hear the case before that date.

As previously reported by TeleGeography’s CommsUpdate, RCOM’s spectrum sale was rejected by the Department of Telecommunications (DoT) this week after Jio said it would not accept liability for past liabilities related to the frequencies.