Rcom Chairman Anil Ambani found guilty by SC in Ericsson default case: 5 things to know
India’s Supreme Court on Wednesday found Anil Ambani, chairman of debt-laden Reliance Communications (RCom), guilty of contempt of court for wilfully failing to pay 5.5 billion rupees ($77.29 million) to telecom equipment maker Ericsson. The court ordered the billionaire and two RCom directors to pay 4.5 billion rupees to Ericsson within four weeks or risk a three-month jail term, according to a ruling from a two-member bench headed by Supreme Court judge Rohinton Fali Nariman. The RCom had previously deposited more than 1 billion rupees with the court. In a statement, the Indian telco said it respected the ruling and “shall comply with the same”.
1. The matter:
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. (TV grab -Zee Business)
2. Supreme Court Verdict:
The Supreme Court asked RCom to repay the dues by Dec. 15, a deadline the company missed. (TV grab -Zee Business)
3. Problems for Rcom:
RCom has struggled for cash partly as a result of a price war triggered by the market entrance of Reliance Jio Infocomm, controlled by Anil’s elder brother and Asia’s richest man, Mukesh Ambani. (TV grab -Zee Business)
4. RCom owed banks $7 billion
RCom owed banks $7 billion as of March 2017, when it last made its debt level public. It also owes money to telecom equipment vendors. (Reuters)
Anil Ambani held, Reliance shares after rulling:
After the ruling, shares fell 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. (TV grab -Zee Business)