RCom, Reliance Jio terminate pact for sale of telecom assets

Anil Ambani Thanks Mukesh Nita Ambani For'Support In Clearing Dues

RCom, Reliance Jio terminate pact for sale of telecom assets

At the start of the year Ericsson requested RCom Chairman Anil Ambani be locked up unless his company settles its debts but a couple of months later it still hadn't coughed up.

Reliance Communications could not be reached for comment.

But RCom said here the airwaves deal had been called off by "mutual consent" due to objections from India's telecom department and more than 40 of the company's foreign and domestic lenders.

On May 29, RCom offers an upfront payment of Rs 550 crore to Ericsson, as a settlement, on condition that Ericsson withdraws the insolvency application. Ericsson refuses and files contempt of court petition in the Supreme Court against Anil Ambani.

Rcom has paid Ericsson almost Rs 580 crore including penalty interests, thereby ensuring the telco's chairman Anil Ambani does not go to jail. The repeated failure to comply and Ambani's personal guarantee landed him in trouble last month, with the Supreme Court holding him in contempt. RCom moves the court for an extension of the deadline, but the plea is dismissed.

Mukesh Ambani, chairman of Reliance Industries Ltd, has provided around Rs 450-crore bailout to younger brother Anil Ambani, potentially saving the chairman of the debt-laden telecom firm Reliance Communications Ltd (RCom) from a jail term in a case involving a payout to Swedish company Ericsson.

The court had set March 19 as the last date to make the payment and had threatened to send the accused to jail if the money was not paid.

The Supreme Court in February found that Ambani, 59, had refused to pay telecom giant Ericsson 5.5 billion rupees ($77 million), as previously ordered by India's top court. Appearing for R Com, senior Advocates Kapil Sibal and Mukul Rohatgi had asked the court to accept Rs 118 crore towards outstanding dues to Ericsson India to establish its bonafide.

This means the big brother has provided a lifeline to Anil Ambani despite issues in the past as Nita and Mukesh Ambani have stepped in to save Anil in the nick of time.

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