Today in the Supreme court the second act in the Reliance communications versus Ericson saga had started. The Anil Ambani-group company sought to take off of its objection to the insolvency application filed by Ericson. The telecom equipment maker after recovering dues worth over Rs. 500 crores from RCom had opposed the withdrawal of objections and now wants the insolvency proceedings to end.
In an order, the NCLAT noted, “the payment of Rs 550 crore in favor of the ‘Operational Creditor’ [Ericsson] shall be subject to the decision of these appeals. If the appeals are dismissed, the ‘Operational Creditor’ will pay back the amount to the ‘Corporate Debtors’ [RCom].”
This means if appeals to the NCLT order in the process of withdrawal got dismissed, the proceedings under the bankruptcy law will start and Ericsson would need to pay back Rs 550 crore to RCom. This could be the reason why Ericson wants the proceeding to end and is arguing over the withdrawal of its insolvency application.
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