Anil Ambani: Guilty of Contempt of Court, Shares Down, Wealth Eroded 95% Since 1996

New Delhi: Reliance Communications Ltd (RCom) chairman Anil Ambani wilfully did not pay its dues to Ericcson, said the Supreme Court, holding him guilty of contempt. The SC directed Ambani to pay the Swedish telecom equipment maker Rs 453 crore within a month, with the bench headed by Justice R.F. Nariman adding that he would face a three-month jail term if the payment was not made in time.

"RCom Did not pay wilfully"

RCom had no intention of paying its dues and had 'wilfully' not paid Ericsson the amount it owed, the court noted. The top court also rejected an apology from the company. For not adhering to the payment deadlines set out by the court, a Rs 1-crore fine each was also imposed on RCom, Reliance Telecom Ltd and Reliance Infratel Ltd.

The amount owed to the Swedish telecom equipment maker has to be deposited with the registry of the Supreme Court, which was ruling on Ericsson's contempt plea against the company and its chairman Anil Ambani for "wilful disobedience" of the court's earlier orders to pay Rs 550 crore to the telecom equipment maker. Ericsson had moved three contempt petitions against RCom.

RCom to comply with SC judgements

Reliance Communications said the company accepts the judgment by the SC and the "group shall comply with same."

Mukul Rohatgi, appearing for RCom, told the court that Ambani could not be made personally responsible for the unpaid dues since the company is a public listed one with lakhs of shareholders and an individual director or the entire group. Rohatgi added that the company did not make any unconditional undertaking. The offer was conditional on a deal with Reliance Jio, which did not come through owing to withheld clearance from the department of telecommunications (DoT).

RCom's stock value has eroded over 95% since 2006

Anil Ambani's bad day that he had in court reflected in share market as well with Shares of Reliance Group companies(Anil Ambani's) ended in negative terrain after the Court held him guilty of contempt of court. Now with today's decline, the market capitalisation of the RCom, which is going through the debt resolution process under IBC, plunged as much as 95.49 per cent to Rs 1,604 crore. As per ACE Equity data, the market capitalisation of the company stood at around Rs 35,575 crore as on March 6, 2006.