Reliance Communications saves chairman Anil Ambani from going to jail by paying Ericsson dues of Rs 462 crore.
Cash-strapped Reliance Communications (RCom) has saved chairman Anil Ambani from going to jail by paying Ericsson dues of Rs 462 crore, suggested media report.
Swedish telecom equipment maker's lawyer confirmed receipt of the payment, according to a Economic Times report.
Last month, the Supreme Court had held Ambani in contempt for not following its order to pay back Rs 550 crore to Ericsson for its services to now-defunct Reliance Communications. The top court had ordered him to pay up within four weeks. That timeline ends tomorrow on Tuesday. By Supreme Court's order, failure to pay back Ericsson within the stipulated will land Ambani in jail for three months. Faced with prison time, Anil Ambani had promised to pay back, but things have not gone his way over the past few weeks.
Around a week before the Supreme Court order to pay up, Anil Ambani-led Reliance Group got into a bitter spat with L&T Finance and certain companies of the Edelweiss Group. The reason was the two firms invoking pledged shares of four companies of the group after RCom filed for bankruptcy. While the debt-laden telecom operator had cried foul, both companies had retaliated with arguments that enough chances were given to Anil Ambani's telecom business to come clean, to no avail.
Filing bankruptcy, RCom had hoped for timely resolution of its problems, within the mandated 270 days to be exact. But Ericsson had challenged RCom insolvency plea, and the same was put on hold till the dues were paid. Ericsson had argued that Anil Ambani's Reliance Group had money to invest in Rafale, but not pay back its dues. The stay on bankruptcy means that Reliance Group cannot sell its assets either.
RCom had been pinning its hopes on around Rs 259 crore in income tax refund with its lenders. While the telco had been hoping to clear its dues with these funds, but the banks' reluctance to let go of the said funds has thrown a spanner in Anil Ambani's plans. NCLAT's decision to stay out of it has not helped the younger Ambani a great deal.
RCom cannot go to NCLT either as Ericsson had moved Supreme Court before the telecom business filed for bankruptcy. Thus, so far it seems, only way for Anil Ambani to escape prison is to pay up.