• Saturday, June 25, 2022

Business

Indian tycoon Ambani pays debt after court threatened jail

Anil Ambani (Photo: PUNIT PARANJPE/AFP/Getty Images).

By: Sarwar Alam

Indian tycoon Anil Ambani has settled a multi-million debt with Sweden’s Ericsson, the company said on Monday (18), after judges threatened the billionaire with jail if he did not pay his dues.

The Supreme Court in February found that Ambani, 59, had refused to pay telecom giant Ericsson 5.5 billion rupees ($77 million), as previously ordered by India’s top court.

The judges warned that Ambani would be jailed for three months if 4.5 billion rupees were not stumped up within a month.

His firm Reliance Communications — which is some $4 billion dollars in debt after a brutal telecom price war with his brother Mukesh, India’s richest man — said it would comply with the ruling.

“We’ve received complete payments, as mandated by the Supreme Court, today from Reliance Communications,” a spokesperson for Ericsson told AFP on Monday, without elaborating on the details of the settlement.

Reliance Communications could not be reached for comment.

Shares of Reliance Communications fell by almost 10 percent on India’s Bombay Stock Exchange at the close of markets Monday, just the latest sharp dip.

The company filed for insolvency after Reliance Communications failed to sell assets to pay back lenders.

The dispute with Ericsson started when the Swedish firm sought to recoup 16 billion rupees from Reliance Communications. They reached a settlement last May, but the Indian company failed to meet payment deadlines.

Ambani had hoped to avoid insolvency proceedings by offloading his company’s telecom tower and spectrum business to his brother’s Reliance Jio for $2.4 billion. But the deal has 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.

Eastern Eye

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