Reliance Industries Limited (RIL) Chairman Mukesh Ambani came to the aid of his younger brother Anil Ambani on Monday, most certainly saving the latter from going to jail, by assisting in paying off the Supreme Court-stipulated amount that Anil Ambani's Reliance Communications (RCom) owed in dues to Swedish company Ericsson.
The repayment of the dues comes in the nick of time for Anil Ambani, with the Supreme Court's deadline set to expire on Tuesday.
Anil Ambani thanked his brother Mukesh Ambani, chairman of Reliance Industries Ltd, and his wife Nita Ambani after his debt-laden firm RCom cleared the Rs 550 crore dues of Ericsson. Mukesh Ambani has provided around a whopping Rs 450-crore bailout to younger brother Anil Ambani.
"My sincere and heartfelt thanks to my respected elder brother, Mukesh, and Nita, for standing by me during these trying times, and demonstrating the importance of staying true to their strong family values by extending this timely support. I and my family are grateful and deeply touched with their gesture,” Anil Ambani said in a released statement.
The stepping-in of big brother Mukesh Ambani to help Anil Ambani comes almost 13 years after the larger Reliance Group was split between the two brothers in 2006.
The apex court had on February 20 held Anil Ambani guilty of contempt of court for willfully violating its order and not paying up the Rs 550 crore owed to the India arm of the Swedish telecom equipment major. The Justice RF Nariman-led bench had ordered RCom to pay Rs 453 crore to Ericsson India within four weeks failing which the younger Ambani would face a three-month jail term. The remainder of the amount had already been paid.
At that time, Reliance Communications had said "We respect the Honourable Supreme Court judgement. The RCom Group shall comply with the same."'
The Supreme Court had also at that time imposed a Rs 1 crore fine each on Anil Ambani, as well as Reliance Telecom chairman Satish Seth and Reliance Infratel chairperson Chhaya Virani, with a one-month jail stint set to be awarded had they failed to pay the fine within four weeks.
The deal between Reliance Communications - once a big player in the telecom space - and Ericsson extends back to 2014, long before RCom came to be encumbered by a massive debt at a time when Reliance Jio's entry disrupted the telecom market and triggered a massive consolidation. In fact, a deal had even been agreed for the sale of RCom's assets to Reliance Jio in an effort to pare debt, but it fell through on account of the Department of Telecom (DoT) holding that Jio should also be transferred RCom's arrears. Since then, RCom filed has entered the NCLT (National Companies Law Tribunal) for a resolution. Both these - the failed assets sale to Jio and the insolvency proceedings - had been cited by RCom for its earlier inability to pay off the dues owed to Ericsson.