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Thu 21 Feb 2019 12:03 PM

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Reliance Communications asks court to release funds for Ericsson

Move by Reliance Communications comes a day after India's top court it to pay $63.6m to Swedish telecom equipment firm

Reliance Communications asks court to release funds for Ericsson
Anil Ambani

Reliance Communications, the group company of the Anil Ambani-led Reliance ADAG group, said it has requested urgent approval from its lenders to release $36.5 million (Rs 260 crore) it received from income tax refunds, and to be paid directly to Swedish telecom major Ericsson.

The move by Reliance Communications comes a day after India’s top court held Reliance ADAG group chairman and two of its directors guilty of contempt and ordered it to pay $63.6 million to Swedish telecom equipment major within four weeks.

The order by a Supreme Court of India bench of Justices RF Nariman and Vineet Saran said the failure to pay the amount within the stipulated time frame will result in a 3-month jail term for Anil Ambani.

Anil Ambani is the younger brother of Reliance Industries chairman Mukesh Ambani, the richest Indian businessman, who also figures the Forbes 2018 World’s Billionaire’s list at 19th slot.

In a communication to the Bombay Stock Exchange on Thursday, Reliance Communications said the company was "confident of raising the balance $28 million for payments to Ericsson, in order that the entire $77.27 million (rs 550 crore) plus interest thereon stands paid to Ericsson well within the time of 4 weeks allowed by the Supreme Court".

A sum of $16.6 million has already been deposited with the Supreme Court of India, R Comm said.

Anil Ambani and his now defunct telecom services company was told to pay the amount to Ericsson to purge the contempt for wilfully not paying the Swedish company despite the court’s earlier order on this.

Additionally, apex court has imposed a fine of $0.14 million (Rs 1 crore) on the three RCom entities.

This will also have to be deposited within four weeks or the directors will spend a month each in jail.

Ericsson had filed three contempt pleas against Anil Ambani, Reliance telecom chairman Satish Seth and Reliance Infratel chairperson Chhaya Virani in the Supreme Court for not clearing its dues.

The Indian top court on Wednesday had rejected RCom and Ambani's unconditional apologies, saying they had shown a cavalier attitude to the administration of justice.

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