RCom boss opts to pay Ericsson bill rather than go to prison

Mukesh Nita help Anil Ambani pay Rs 550cr debt save him from jail

Anil Ambani and Mukesh Ambani

The Supreme Court holds Anil Ambani and three RCom companies guilty of contempt of court for not complying with the undertaking to settle the Rs 550 crores dues of Ericsson.

The SC bench, comprising Justices R F Nariman and Vineet Saran, said the three Reliance companies failed to adhere to the 120 days deadline and 60 days extra given by the apex court to pay the required amount to Ericsson. Earlier this month, Anil Ambani and his wife - Tina - attended the wedding of Mukesh's son, Akash, with Shloka Mehta in Mumbai along with a host of high-profile personalities.

The Swedish firm signed a deal in 2014 to manage and operate RCom's network and previous year approached the court over the unpaid dues.

The split did not end the feud and the two bickered over commitment of Mukesh' Reliance Industries for supply of gas to Anil's power plants.

The two brothers had fought a bitter public battle after his father Dhirubhai died without leaving a will.

"Separately, RCom and Reliance Jio mutually made a decision to terminate agreements for sale of specified assets that they signed in December 2017 and August 2018, citing delays in approval from the government and lenders".

Mukesh Nita help Anil Ambani pay Rs 550cr debt save him from jail
The Ambanis Mukesh Nita Anil and Tina

"The requisite payment of Rs 550 crore and interest thereon to Ericsson has been completed today in compliance of the judgment of the Hon'ble Supreme Court", said the company spokesperson.

"The said transactions have become incapable of being consummated in accordance with the terms thereof, on account of various factors and developments since the execution of the said agreements almost 15 months ago", the company added.

The two directors are Reliance Telecom chairman Satish Seth and Reliance Infratel chairperson Chhaya Virani.

Ericsson had moved a bankruptcy court in 2017 alleging it had not been paid dues of around Rs 1,600 crore after signing a deal in 2013 to operate, maintain and manage the telco's nationwide network.

The payment comes a day before the deadline set by the Supreme Court expires on Tuesday. It extracted a personal guarantee from Ambani to pay the dues.

The Supreme Court in February found that Ambani, 59, had refused to pay telecom giant Ericsson 5.5 billion rupees ($77 million), as previously ordered by India's top court. Shares of RCom closed at Rs 4 apiece on the BSE Monday, 9.30 per cent lower than the previous close.

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