Billionaire Ambani risks jail over missed Ericsson payments

Billionaire Ambani risks jail over missed Ericsson payments

Billionaire Ambani risks jail over missed Ericsson payments

India's Supreme Court on Wednesday found Anil Ambani, chairman of debt-laden Reliance Communications (RCom), guilty of contempt of court for wilfully failing to pay 5.5 billion rupees ($77.29 million) to telecom equipment maker Ericsson.

Reliance Communications (RCom) had told the court they had tried to move "heaven and earth" to ensure Ericsson gets its due but was unable to do so due to failure of assets sale deal with Reliance Jio.

They ruled the billionaire will be jailed for three months if INR4.5 billion are not stumped up within four weeks. If they fail to do, they could have to serve a jail term of three months.

The counsel told the court that RCom is a public listed company with lakhs of shareholders and neither an individual director nor the entire group can be made liable for liability of the company.

The Bench noted that ₹118 crore had already been deposited in the court's Registry and directed that this be handed over to Ericsson within a week. The money would be paid over to the Supreme Court Legal Services Committee.

The bench said the three Reliance companies did not adhere to the 120-day deadline and the extra 60 days given by the apex court to pay Rs 550 crore to Ericsson.

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As the year ended, and with Ericsson ostensibly still not having received its dues, it filed a second contempt plea in January 2019, which led to today's judgement (February 20), holding Ambani and two other company directors in contempt.

In 2014, Ericsson had signed a deal with RCom to operate its nationwide telecom network.

During the hearing, however, senior advocates Kapil Sibal and Mukul Rohatgi, appearing for RCom, had asked the Supreme Court to accept Rs 118 crore towards outstanding dues to Ericsson India to establish its bonafide.

On October 23 a year ago, the top court had asked RCom to clear the dues by December 15.

"We are looking at additional investment in India, so we are in discussions with other companies as well, including Reliance and others", Saudi Aramco chief executive officer Amin Nassar said in a panel discussion in Delhi.

The contempt finding came on a plea filed by Ericcson India which has accused Ambani of not clearing dues of Rs 550 crore. "The company in question (RCom) will pay, not the directors personally".

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