RCom’s Ambani charged with contempt of court

RCom’s Ambani charged with contempt of court

Reliance Communications (RCom) chairman Anil Ambani has been found guilty of contempt of court by India’s Supreme Court, leaving him facing a potential jail sentence.

The country’s highest court ruled that Ambani had deliberately avoided paying Ericsson service charges worth INR5.5 billion ($77.3 million). Along with two other RCom directors, Ambani was given four weeks to pay the Swedish company INR4.5 billion or face a three-month spell in jail.

RCom has stated that it will defer to the court and plans to respect its orders. The ruling was welcomed by Ericsson, which filed a lawsuit against RCom in 2018 after the operator failed to pay due service charges. The vendor had been managing and operating RCom’s network since signing a deal with them in 2014.

However, RCom proceeded to miss extended payment deadlines, incurring further action from Ericsson with the vendor calling for Ambani to be arrested. Since the initial lawsuit, Ericsson has thrice requested that Ambani face contempt of court charges, as well as calling for him to be barred from leaving India and have his personal assets frozen.

RCom had planned to pay back Ericsson using the proceeds from selling its assets to Reliance Jio. However, the Indian Department of Telecom refused to approve the sale, causing RCom to miss its initial payment deadline. While the operator was able to make an upfront payment of more than INR1 billion to Ericsson in January, later that month its deal with Jio collapsed, leading RCom to take steps towards insolvency.

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