Till contempt do us part…
Ericsson has filed a contempt petition in the SC seeking prison time for Anil Ambani from the Government for not clearing its dues.
Meanwhile, the government is also being sued for contempt by Anil Ambani for not approving its deal with Reliance Jio that would help it clear dues of Ericsson and other lenders. As Anil Ambani awaits clearance for Reliance Communications’ (RCom) asset sale to Reliance Jio Infocomm since December 2017, its creditor Ericsson is ramping up the pressure on the other end.
RCom was ordered by the court to pay Rs 550 crore to Ericsson by December 15, but the same is held up since DoT has refused to allow the spectrum sale. Anil had also given a personal guarantee for the payment to Ericsson.
In response, the Swedish telecom equipment maker has filed a second contempt petition in Supreme Court against Anil Ambani, asking the Government to ensure that Ambani is not allowed to leave the country and detained in a civil prison until the payment is made with interest. Ericsson has also asked the court to “allow insolvency resolution proceedings under and in accordance with the order and proceedings of the NCLT against the respondents”. Contempt of court can invoke a jail time of upto six months according to the act.
RCom on the other hand has filed a contempt of court against the Department of Telecom for delaying its deal with Reliance Jio that would have enabled it to settle dues with Ericsson and other lenders. It says that it could pay the deferred liabilities to DoT of Rs 10,900 crore and also pay Rs 38,000 crore to its lenders.
The deal with Reliance Jio has been stalled by DoT as it claims Rs 2,947 crore in spectrum-related dues from RCom. As required by the court, RCom had given a corporate guarantee of Rs 1,400 crore to DoT on December 3, 2018. DoT was supposed to give a no-objection certificate for the deal within a week of receiving this corporate guarantee, but has not done so yet. RCom has called it a wilful and deliberate disobedience by the DoT.
The government asked Reliance Jio to agree to undertake any liabilities of RCom for the deal to be approved, which the latter has refused. However, RCom says this is an unnecessary controversy being raised by the government and is against trading guidelines. Also, the delay will cause “irreparable harm, loss and injury” not just to RCom but also to secured lenders, which include 17 public sector banks. Both petitions are scheduled in the Supreme Court for today.
With respect to the Ericsson petition, an RCom spokesperson commented to PTI, “It is deeply regrettable that Ericsson India Private Limited (Ericsson), an operational unsecured creditor, is attempting a trial by media and sensationalising issues, as evidenced in recent media reports.” RCom claims that no notice on the contempt petition has been received by them.