Reliance Communications has paid Ericson Inc 4.62 billion rupees ($67.42 million) as ordered by the Supreme Court saving Anil Ambani the ignominy of facing a jail term. Ericson’s lawyers confirmed receiving the amount, as per news agencies.
Sometime last month, the Supreme court Anil Ambani, chairman of the debt-laden firm, was guilty of contempt of court for his inability to pay Swedish telecom equipment maker.
Anil Ambani was given four weeks time to comply with the Court’s order to pay Ericsson 4.5 billion rupees. If he failed to do so, Ambani would have to serve a three-month jail term for contempt of court.
RCom, which owes a total 5.71 billion rupees to Ericsson, including a one-time settlement of 5.5 billion rupees and interest payments of 210 million rupees, had already deposited 1.18 billion rupees with the Supreme Court in February.
The Swedish firm signed a deal in 2014 to manage and operate RCom’s network and last year approached the court over the slurry of unpaid dues.
RCom has struggled for cash partly a result of a price war triggered by the market entrance of Reliance Jio Infocomm, controlled by Mukesh Ambani.
RCom had also sought approval from its lenders to release tax refunds of a further 2.6 billion rupees to Ericsson.
Additionally, the company was also looking at selling its real estate assets to pay Ericsson, said some sources.
RCom had been pinning its hopes on around Rs 259 crore in income tax refund with its lenders. The telcom operator had been hoping to clear its dues with these funds. However, the bank was hesitant to let go of the said funds. This has thrown a spanner on Anil Ambani’s plans. NCLAT’s decision to stay out of it has not helped the Anil Ambani a great deal.
RCom couldn’t go to NCLT either as Ericsson has moved Supreme Court before the telecom business files for bankruptcy. As of now, to escape prison, Anil Ambani must be ready to pay his impending dues.
