RCom-Ericsson Case: Supreme Court Finds Anil Ambani Guilty of Contempt

The court ordered the billionaire and two RComdirectors to cover Rs. 450 crores into Ericsson in just four months or threat a three-month prison term, according to a ruling from a two-member bench headed by Supreme Court judge Rohinton Fali Nariman.

RCom formerly deposited over Rs. 100 crores with the courtroom.

In a statement, the telco said it respected the ruling and”shall comply with the same”.

The Swedish company signed a deal in 2014 to handle and operate RCom’s community and last year approached the courtroom over the outstanding dues.

The court asked RCom to repay the dues by December 15, a deadline the company missed.

RCom has fought for cash partly as a consequence of a price war triggered by the market entry of Reliance Jio Infocomm, controlled by Anil’s elder brother and Asia’s richest person, Mukesh Ambani.

Before this month, RCom advised the courtroom that a bargain to sell fibre and tower resources to Reliance Jio failed, prompting RCom to turn into bankruptcy courts for debt resolution and hence wasn’t in a position to pay the dues.

RCom owed banks $7 billion (roughly Rs. 49,800 crores) as of March 2017, when it last made its debt amount public. Additionally, it owes money to electronics vendors.

“It will be quite difficult for RCom to satisfy the ordered payment and group companies may be utilised to pay the cash through inter-corporate loans,” said Sameer Kalra, equity research analyst and founder of Goal Investing.

“This sets danger on group companies as well and may result in the delay in the sale of stakes in other businesses,” he explained.

After the judgment, stocks dropped sharply in Anil Ambani-controlled companies such as Reliance Capital, Reliance Infrastructure, Reliance Power, Reliance Naval and Engineering, Reliance Home Finance, and Reliance Nippon Life Asset Management.

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