INDIA’S top court told billionaire tycoon Anil Ambani today (20) that 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 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 Rs 5.5bn ($77 million) as previously ordered by the Supreme Court.
They ruled the billionaire will be jailed for three months if Rs 4.5bn are not stumped up within four weeks.
Ambani’s firm said it will comply with the ruling and pay the debt. Some Rs 1.0bn 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 Rs 16bn 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 $2.4bn, 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.