New Delhi: Had the elder brother Mukesh Ambani agreed to bail the younger one, Anil Ambani, out, the latter could have been on a different course, one that does not involve the possibility of going bankrupt. Courtesy a failed deal to sell company assets to elder brother Mukesh’s Reliance Jio, Reliance Communications chairman Anil, was unable to pay the dues he owes to Ericsson and the Supreme Court held him guilty of contempt. As things stand now, RCom has entered insolvency proceedings, is staring at the possibility of going bankrupt and Anil faces the possibility of arrest if he fails to clear Ericsson’s dues.
The SC, in its judgement, had observed that RCom had no intention of paying its dues to the Swedish telecom equipment maker and had also declined an apology from the company. The court imposed a Rs 1-crore fine on RCom, Reliance Telecom Ltd and Reliance Infratel Ltd. All of it because Mukesh had his qualms on bearing guarantee for his younger brother’s past debts.
Asset sale plan with Jio failed
Cash-strapped RCom had also planned to sell its assets that could reduce the debt by Rs 18,000 crore. The deal to sell RCom’s spectrum assets to Mukesh’s Reliance Jio was a major part of the deal. The SC noted that the deal fell through not because of the Department of Telecom’s (DoT) refusal, but Mukesh’s reluctance to bear guarantee for the past debts of Anil.
“The sale of spectrum to Reliance Jio, therefore, did not fructify, not because the DoT wrongfully refused to give its NOC, as has been alleged by the Reliance Companies in their pleadings filed in this case. It fell through only because the prospective buyer, Reliance Jio, refused to give the undertaking that if called upon, it would pay the erstwhile debts of the seller of the spectrum,” observed the apex court.
By holding Anil Ambani contempt of court, the top court threatened to send him to jail for three months if he does not pay his dues in four weeks.