Agencies/ New Delhi
The Supreme Court told billionaire tycoon Anil Ambani yesterday he must pay his debts to Sweden’s Ericsson or go to jail, the latest twist in a saga that forced his telecom company to file for bankruptcy.
Ambani’s debt-laden Reliance Communications is some $4bn in debt after a brutal telecom price war that pitched him against his brother Mukesh – India’s richest man – and gripped the country’s business community.
Judges found Anil Ambani, 59, had refused to pay telecom giant Ericsson Rs5.5bn ($77mn) as previously ordered by the Supreme Court. They ruled the billionaire will be jailed for three months if Rs4.5bn are not stumped up within four weeks.
As part of yesterday’s ruling, the judges slammed Ambani for a “cavalier” attitude and fined him and two company directors, whom they also found guilty, Rs10mn each.
Ambani and the executives had “breached their undertaking,” the judges said, terming it “wilful disobedience” of their order that they should repay Ericsson. Ambani’s firm said it will comply with the ruling and pay the debt.
Some Rs1bn have already been deposited with the court, which said the sum will be handed to Ericsson. Earlier this year, Reliance Communications said it had decided to start insolvency proceedings after failing to sell assets to pay back lenders.
The dispute started when Ericsson sought to recoup Rs16bn from Reliance Communications. They reached a settlement last May, but the Indian company failed to meet the payment deadlines.
Ambani had hoped to avoid insolvency proceedings by offloading his company’s telecom tower and spectrum business to his brother’s business Reliance Jio for $2.4bn, but the deal hit regulatory hurdles and opposition from creditors.
Reliance Communications faces liquidation if it is unable to pay back its debts by November.
The court, in its 41-page judgment, dismissed the defendants’ “unconditional apology” for disobeying its orders.
It said “conditional” undertakings given by the three on August 9, 2018, to the court amounted to “misdemeanour”.
They gave these undertakings despite the court, in an order dated August 3, having given them leeway of a 120-day-period to pay back Ericsson.
“It is clear that the three Reliance companies had no intention, at the very least, of adhering to the time limit of 120 days or to the extended time limit of 60 days plus, as was given by way of indulgence, by the order dated October 23, 2018,” the court said.
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