Supreme Court declared its verdict and dictated that Anil Ambani is guilty of not paying INR 550 Crore to Ericsson. This decision from the Supreme Court took a toll on the shares of Reliance Communication.
The telecom operator brand’s share plummeted by 9% intraday on 20th February due to the Supreme Court’s decision. The court found RCom taking cavalier actions by not paying the required amount.
The top court ordered Anil Ambani and RCom’s two directors to pay INR 453 Crore along with the interest. This amount has to be paid within 28 days to telecom equipment manufacturer Ericsson India. If they fail, they will have to spend 3 months in jail custody.
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Ericsson filed three applications regarding the unpaid dues. The court also mentioned that the non-payment of the due was intentional.
The justice bench, Vineet Saran and RF Nariman reserved judgment in 13th February when Ericsson India accused Anil Ambani that he has money for Rafale deal but not to pay the aforementioned dues.
These charges were denied by RCom. It is then the applications were submitted to the Supreme Court. The court also imposed INR 1 Crore penalty on Anil Ambani.
An RCom spokesperson said “We respect the Honourable Supreme Court judgment. The Reliance Communications Group shall comply with same.”
RCom is already on the verge of bankruptcy and insolvency after the declaration of defaulting on the loans and dues. It has a debt of INR 32,700 Crore but has a balance of INR 824 Crore as calculated in September 2018.
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Sameer Kalra, an equity research analyst, Target Investing, said “It will be very difficult for the company to meet the ordered payment and the group companies might be utilized to pay the due through inter-corporate loans. This puts the risk on group companies as well and might result in a delay in the sale of a stake in other companies.”
