RCom Lenders To Ask Ericsson To Refund Rs 580 Crore For Violation Of IBC

Anil Ambani-led Reliance Communications’ lenders have decided to send a demand notice to Sweden-based Ericsson, asking the telecom equipment company to return the Rs 580 crore that it received from RCom under a Supreme Court directive, The Economic Times reported, citing sources.

The decision was taken at a recent meeting attended by RCom’s committee of creditors and consortium of lenders, led by State Bank of India (SBI), who claim that the payment made to Ericsson qualifies as a preferential transaction under the Insolvency and Bankruptcy Code (IBC), sources told the paper.

A ‘preferential transaction’ is a payment to a single creditor or set of creditors whose claims have the highest importance as per the IBC.

In the particular case, Ericsson is just an operational creditor as it only provided services to the company and payment to the company ahead of the banks was a violation of the IBC code, the sources told ET, adding that if the Swedish company refuses to pay back the said amount, the lenders may explore legal options.

An Ericsson spokesperson said that they have not received any such request from the lenders to the telecom company.

The debt-laden telecom company was admitted for insolvency proceedings in the National Company Law Tribunal in February.―CNBC TV18

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