Swedish telecom gear maker Ericsson will not accept any settlement offer by Reliance CommunicationsNSE -0.90 % (RCom), unless directed by the Supreme Court, people familiar with the matter said. The stance comes post the debt-laden telco’s offer to make payments using income tax refunds to the company. “RCom lawyers had said they are willing to give Rs 129 crore, which is an income tax refund, and another forthcoming refund of Rs 134 crore. This was over and above Rs 118 crore that has been deposited with the Supreme Court registry earlier,” said Anil Kher, senior advocate representing Ericsson, on the option given by RCom in the top court this week. “However, Ericsson did not respond to this suggestion and left it to the decision of the court,” the senior counsel said.
People aware of developments say Rs 381 crore is way lower than the settlement term of Rs 550 crore and therefore Ericsson is unlikely to accept it. The operational creditor said it had settled for Rs 550 crore as settlement when total dues were over Rs 1,500 crore. The Supreme Court has reserved orders on Ericsson’s contempt petitions against RCom and its chairman Anil Ambani on the operator’s failure to comply with its assurance in court to pay arrears of Rs 550 crore to its Swedish equipment supplier. This will be the second time in recent weeks that the operator under a debt of over Rs 40,000 crore has given Ericsson a settlement option. The Swedish company however rejected the offer, saying it needs to be paid first, and that the matter needs to be settled through the top court. Ambani appeared in the top court twice this week during the contempt case hearing.
The battle between the Department of Telecommunications and RCom over one-time spectrum-related charges (OTSC) of Rs 2,000 crore was heard by the top court on Friday. The court refused to stay an earlier order by Telecom Disputes Settlement and Appellate Tribunal (TDSAT), which had directed the DoT to return bank guarantees worth Rs 2,000 crore that were given as OTSC by RCom. The Supreme Court has asked DoT to reply within three weeks and no directive was given for the renewal of the said bank guarantees expiring in third week of March this year, bringing some relief to the telco. The top court has listed the matter for hearing after four weeks.