Ericsson seeks jail for RCom Chairman Anil Ambani unless dues cleared

MUMBAI: Telecom equipment maker Ericsson filed its second contempt petition in the Supreme Court against Reliance Communications’ Chairman Anil Ambani, asking that he be detained in civil prison and be barred from travel overseas unless he ensures payment of Rs 550 crore owed to the Swedish company.

Separately, RCom initiated contempt proceedings in the apex court against the Department of Telecommunications, blaming it for delaying a spectrum sale that would have enabled dues to be paid to Ericsson and lenders. Ambani had given a personal guarantee in the court, backing prompt payment of Rs 550 crore to Ericsson.

The Swedish company said Ambani should not be allowed to leave the country and sought his detention in civil prison unless the dues are cleared, according to the petition mentioned in the court on Thursday and reviewed by ET.


“The fresh application was filed because RCom and others did not comply with the SC order. We have been waiting for payments for a long time and their default is contempt of court,” said senior advocate Anil Kher representing Ericsson.

“Under contempt of court act, if found guilty, this could lead to civil imprisonment, which means jail up to six months.” RCom did not respond to ET’s queries on the matter. The Supreme Court will hear both the petitions on Monday. Shares of RCom fell 2.2% to Rs 13.51 at the close on the BSE on Thursday.

The Swedish equipment maker asked the court to direct RCom’s lenders to pay the amount due along with interest. It sought a stay on the further sale of assets and a reversal of transactions already completed, in accordance with an appellate tribunal’s earlier order.

Ericsson also asked the court to “allow insolvency resolution proceedings under and in accordance with the order and proceedings of the NCLT against the respondents.” The National Company Law Tribunal (NCLT) had earlier admitted an insolvency petition against RCom, which the telco managed to stave off by chalking out an asset monetisation plan to reduce its debt of Rs46,000 crore by Rs 18,000 crore.

This is the second time that RCom has missed paying Ericsson. After missing the first deadline of September 30, the Swedish company filed a contempt petition against Ambani in October. At that time, the Supreme Court gave RCom more time - till Dec 15 to pay Ericsson.

RCom reiterated that the telecom department was to be blamed for delaying payments to lenders and Ericsson by not granting a no-objection certificate for its spectrum sale to Reliance Jio Infocomm.

The DoT has “scant regard and respect” for the orders of this court, the Ambani-owned telco said in its petition, which was mentioned on Thursday. The government said the approval was delayed because Jio refused to be held liable for RCom’s past dues that haven’t been recovered from the seller. RCom said in its petition DoT had “mischievously raised a controversy” by asking Jio for an undertaking on past dues, which it alleges goes against trading guidelines. RCom and Jio last week extended the term of their spectrum deal to June 28, aiming to quash talk that the agreement was dead.

RCom and DoT have battled over the government’s claim of spectrum-related dues worth Rs 2,947 crore. The dispute went up to the Supreme Court, which directed DoT to approve the RCom-Jio trading pact and accept a Rs1,400 crore corporate guarantee, instead of a bank guarantee, as well as a parcel of land from an RCom subsidiary to cover the dues.

The debt-laden telco plans to sell its assets to Jio and Canadian firm Brookfield for Rs 18,000 crore. Once the noobjection certificate comes in, RCom said it will be able to exit insolvency, pay deferred spectrum liabilities to DoT amounting to Rs 10,900 crore and pay lenders Rs 38,000 crore. The telco said if its appeal is not granted, it will cause irreparable harm, loss and injury” not only to the telco but also to “secured lenders including 17 public sector banks, thereby causing loss of public money.”

Ericsson said in its petition: “Upon initiating proceedings for contempt against the respondents and their chairman and officers restrain the respondent being the chairman of i) Reliance Communications Limited ii) Reliance Telecom Limited and iii) Reliance Infratel Limited respectively from leaving the country and direct the government of India through ministry of Home Affairs to issue directions to prevent any of these persons from leaving the country."