Last month was a trouble time for Anil Ambani when Supreme Court alleged him not following the court order to pay INR 550 Crores to Swedish company “Ericsson”. The Supreme court had ordered him to pay up within four weeks. That timeline was on Tuesday (19th March 2019).
By Supreme Court's order, failure to pay back Ericsson within the stipulated can have landed Anil 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.
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But in the meantime, the heroic entry of his elder brother Mukesh Ambani chairman of Reliance Industries Ltd, and Nita Ambani changed the scenario. Both of them extended their helping hand to his brother Anil Ambani and cleared the payment. The Swedish company Ericsson confirmed on Monday (18 March 2019) it has received Rs 458.77 crore from RCom.
The spokesperson of Rcom stated that the required payment of Rs 550 crore and interest thereon to Ericsson has been completed in compliance with the Supreme Court judgment.
The one-time settlement of INR 500 crore plus interest, had deposited in INR 118 Crore with the Supreme Court in February. In 2014, the Ericsson signed a deal to manage and operate Rcom’s network and last year in 2018 they approach Supreme court over the unpaid dues by Anil Ambani.
Supreme Court has found Anil Ambani guilty of contempt of court for failing to pay to Ericsson. The court had ordered Anil Ambani along with the two directors of RCom industry to pay Ericsson the dues within four weeks or a three month of jail for contempt of court. The deadline for the payment was on Tuesday (19.03.2019).
The Mukesh Ambani has rescued his brother for a second time, after their famous feud that dogged the Reliance Group which has resulted in the splitting it into two between the two brothers.
In 2018, Reliance Jio Infocomm, owned by Mukesh Ambani, bought RCom’s wireless assets worth INR 3 Crore in a sign. When Reliance Infocomm which is popularly known as Jio entered the market it affected the RCom as the prices were triggered by the Jio. So, in turn, the RCom faced a partly cash deficit.
In 2017 the RCom, which was the second largest telecom company, was forced to shut its wireless services as they the company was facing widening revenue gap and weighted under a debt of INR 46,000 Crore. In the same year, the Ericsson moved to a bankruptcy court claiming that Rcom’s has not paid dues of around INR 1500 Crore after signing a seven-year deal with the Ericsson in 2013 for the operation and management of telco’s worldwide network. And this was the beginning of the battle between Rcom’s and Ericsson. The case moved from the National Company Law Tribunal (NCLT) to the National Company Law Appellate Tribunal (NCLAT) where the settlement amount of Rs 550 crore was reached between the two parties with the deadline being September 30, 2018.
With RCom not meeting the deadline, Ericsson moved Supreme Court, which gave RCom another deadline - December 15, 2018 – to repay dues, both of which were missed by RCom.
In February 2019, Anil Ambani was contemplated when he missed the deadline of payment dues, Ericsson filed three petitions against Anil Ambani and the Supreme court ordered 19 March 2019 as the last deadline to Anil Ambani for the payment of dues to Ericsson, but it was saved by his elder brother Mukesh Ambani and Nita Ambani when they granted help to Anil Ambani and dues were cleared on Monday (18th March 2019).
When the Ericsson confirmed the payment on Monday, the 18 months long battle with Anil Ambani came to an end.
The company’s attempts to pay part of the dues, including interest, to Ericsson with its income tax refunds of Rs 260 crore failed with the National Company Law Appellate Tribunal (NCLAT) refusing to direct the lenders, including main financial creditor State Bank of India, to release the funds.