The Hush Post| 9:46 am| two-minute-read
Anil Ambani, chairman of the debt-ridden telecom firm Reliance Communications Ltd (RCom) will not go to jail. His elder brother Mukesh Ambani, chairman of Reliance Industries Ltd has bailed out Anil Ambani by paying Rs 458.77 crore for RCom.
Anil has thanked Mukesh and Nita Ambani for their help in paying dues to Swedish company Ericsson.
In February, the Supreme Court had found Anil Ambani guilty of contempt of court for willfully defaulting to pay Ericsson. The court had ordered Anil Ambani and two RCom directors to pay Ericsson the dues within four weeks or face a three-month jail term for contempt of court. The deadline to make the payment expired on Tuesday.
An RCom spokesperson has said that the requisite payment of Rs 550 crore plus its interest to Ericsson has been completed in compliance with the Supreme Court judgment.
RCom, which owed Ericsson a one-time settlement of Rs 550 crore plus interest, had already deposited Rs 118 crore with the apex court. The Swedish firm signed a deal in 2014 to manage and operate RCom’s network and last year approached the court over the unpaid dues.
“My sincere and heartfelt thanks to my respected elder brother, Mukesh, and Nita, for standing by me during these trying times, and demonstrating the importance of staying true to their strong family values by extending this timely support. I and my family are grateful and deeply touched with their gesture,” Anil Ambani said in a statement.
This is the second time that Mukesh Ambani has come to the rescue of his brother after their famous feud that dogged the Reliance Group and ended up splitting it into two between the two brothers.
In 2018, Reliance Jio Infocomm, controlled by Mukesh Ambani, bought RCom’s wireless assets for Rs 3,000 crore, in a sign that the acrimony of the past was buried.
RCom has struggled for cash partly a result of a price war triggered by the market entrance of Reliance Jio Infocomm, popularly called Jio.
With Monday’s payment, the debt-laden telco ends its 18-month long battle with Ericsson.
RCom’s shares plunged 9.3 per cent on Monday to close at Rs 4 on the BSE. The telco, which was once India’s second largest, was forced to shut has its wireless business late 2017 amid plunging revenue, widening losses and weighed under a debt of Rs 46,000 crore.
The company’s attempts to pay part of the dues, including interest, to Ericsson with its income tax refunds of Rs 260 crore failed with the National Company Law Appellate Tribunal (NCLAT) refusing to direct the lenders, including main financial creditor State Bank of India, to release the funds.