Chairman Anil Ambani to be jailed unless RCom pays Ericsson debt, says court
India’s Supreme Court has found Anil Ambani, chairman of Reliance Communications, and two colleagues guilty of contempt. They each have to pay a fine of the equivalent of $140,880 each.
The court told RCom that it has to pay debts of $63.8 million to Ericsson within four weeks, failing which Ambani and the two colleagues will face a jail term of three months.
The other two executives named in the case are Reliance Telecom chairman Satish Seth and Reliance Infratel chairwoman Chhaya Virani. They have a month to pay their fines – or they will face an extra month in jail.
Ambani told the court that RCom has entered insolvency proceedings and was not in control of its funds.
However, a spokesperson for RCom said the company would “respect the judgement of the Supreme Court” and it would comply with its order.
RCom has already deposited $16.6 million with the court, and that will be forwarded to Ericsson, the judges decided.
The court decided that it could not accept an “unconditional apology” from RCom given the company’s previous attitude.
India’s company court said last week that it will start to hear RCom’s bankruptcy case on 6 March. It is seeking a “strategic monetisation” of its subsea subsidiary, Global Cloud Xchange (GCX), its data centre business and its Indian enterprise telecoms business.
It had been hoping to sell its spectrum to Reliance Jio, which is controlled by Anil Ambani’s brother Mukesh Ambani, but that has been blocked by the government’s Department of Telecommunications – though RCom is taking that case to the Supreme Court.
Late last year RCom was considering two bids, each for $1.1 billion, for GCX and the other operations.