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NCLAT reserves verdict on RCom plea to use tax refunds worth Rs 260 cr:

Courtesy/By: Sakshi Shukla | 17 Mar 2019

The National Company Law Appellate Tribunal (NCLAT) on Wednesday reserved its verdict on a plea moved by Reliance Communications (RCom) to release tax refunds worth nearly Rs 260 crore, held in a trust and retention account with the lenders of the company. Nearly 40 lenders of the company, including the State Bank of India (SBI) have opposed RCom’s plan to use this money to pay off Ericsson contending that the funds for paying the latter must come from a different source. The banks are trustees of the account.

RCom wanted to use the tax refunds of nearly Rs 260 crore, parked in the retention and trust account, to pay off Ericsson India as a part of the total payment of Rs 550 crore that it has to make to the latter. The payment by RCom to Ericsson has to be made as part of the Supreme Court’s (SC’s) orders in which it had held Ambani guilty of contempt of court.

On February 20, the apex court had held Ambani and two others guilty of contempt of court for wilfully violating its order by not paying Rs 550-crore dues to Ericsson. RCom has time till March 19 to pay off Ericsson to purge the contempt and avoid a jail term for Ambani and two of his top executives.

Courtesy/By: Sakshi Shukla | 17 Mar 2019