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INDIA-SWEDEN-TELECOMMUNICATION-COURT-AMBANI
Court orders Indian tycoon to pay debt or go to jail
NEW DELHI, Feb 20, 2019 (BSS/AFP) – India’s top court told billionaire
tycoon Anil Ambani Wednesday he must pay his debts to Sweden’s Ericsson or go
to jail, the latest twist in a saga that forced his telecom company to file
for bankruptcy.
Ambani’s debt-laden Reliance Communications is some $4 billion dollars in
debt after a brutal telecom price war that pitched him against his brother
Mukesh — India’s richest man — and gripped the country’s business
community.
Judges found Anil Ambani, 59, had refused to pay telecom giant Ericsson
5.5 billion rupees ($77 million) as previously ordered by the Supreme Court.
They ruled the billionaire will be jailed for three months if 4.5 billion
rupees are not stumped up within four weeks.
Ambani’s firm said it will comply with the ruling and pay the debt. Some
1.0 billion rupees have already been deposited with the court, which said the
sum will be handed to Ericsson.
Earlier this year, Reliance Communications said it had decided to start
insolvency proceedings after failing to sell assets to pay back lenders.
The dispute started when Ericsson sought to recoup 16 billion rupees from
Reliance Communications. They reached a settlement last May, but the Indian
company failed to meet the payment deadlines.
Ambani had hoped to avoid insolvency proceedings by offloading his
company’s telecom tower and spectrum business to his brother’s business
Reliance Jio for $2.4 billion, but the deal hit regulatory hurdles and
opposition from creditors.
Reliance Communications faces liquidation if it is unable to pay back its
debts by November.
The Ambani brothers engaged in a bitter feud for control of Reliance
Industries after their rags-to-riches father Dhirubhai Ambani died in 2002
without a will.
The pair ended up splitting the Reliance group, which was India’s most
valuable listed company.
BSS/AFP/FI/ 1642 hrs