SC holds Anil Ambani, Reliance Comm guilty of contempt

Billionaire Ambani risks jail over missed Ericsson payments

Ericsson case: Anil Ambani guilty of contempt, directed to pay Rs 453 crore or face 3 months jail

The Supreme Court on Wednesday held Reliance Group Chairman Anil Ambani and other two directors guilty of contempt of court.

Reliance Communications, headed by Anil Ambani, has therefore been directed to pay Ericsson Rs. 453 crore within four weeks.

Additionally, a fine of Rs 1 crore was imposed on each of the companies, who have to deposit the same with the Supreme Court Registry.

They ruled the billionaire will be jailed for three months if INR4.5 billion are not stumped up within four weeks.

From undertakings given by Reliance Group's top brass, it appears they have willfully not paid the amount to Ericsson despite orders, said the court.

In fact, a majority of RCom's lenders, led by State Bank of India, opposed Ericsson's move in April 2018, saying that if the company was able to finish the sale of assets (primarily to Mukesh Ambani's Reliance Jio), it could bring Rs 18,000 crore into the company.

Following the Supreme Court order, the shares of multiple entities of the Reliance Group of companies, including RCom, Reliance Infrastructure, Reliance Naval and Engineering, Reliance Power and Reliance Home Finance tumbled.

On August 3, the Supreme Court had ordered that the payment of Rs. 550 crore be made on or before September 30. In October, the court granted Reliance Communications time till December 15 to repay the money after the company sought a 60-day extension.

"The dues of a listed company can't be paid by an individual", he said rejecting the argument that Ambani was liable to pay.

Rohatgi expressed confidence that the bunch will respect the directions on payment of dues to Ericsson. An amount of 118 crore is already deposited with the registry.

The contempt finding came on a plea filed by Ericcson India which has accused Ambani of not clearing dues of Rs 550 crore.

Ericsson signed the deal in 2014 and began proceedings against RCom past year.

The apex court had given one last opportunity to RCom on October 23 past year for clearing the settlement amount and had asked it to clear dues by December 15, 2018, saying delayed payment would attract an interest of 12 per cent per annum.

The Supreme Court said three reliance companies had no intentions to adhere to the instructions given by it. This still leaves a gap of Rs 177 crore - leaving aside the question for the moment on whether RCom will have to pay Rs 550 crore plus interest.

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