Mukesh Ambani bails brother out of jail trouble by paying dues

Mukesh Ambani bails brother out of jail trouble by paying dues

Nearly a decade-and-a-half after a bitter separation, Mukesh Ambani on Monday stepped in to save younger brother Anil from prison by helping him clear the Rs 453 crore Reliance Communications owed Ericsson.

"The requisite payment of Rs 550 crore and interest thereon to Ericsson has been completed today in compliance of the judgment of the Hon'ble Supreme Court", said the company spokesperson. The repeated failure to comply and Ambani's personal guarantee landed him in trouble last month, with the nation's top court holding him in contempt.

"My honest 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 our strong family values by extending this timely support", a late night statement issued by Anil's firm quoted him as saying. He added that he is "grateful" that they have "moved beyond the past".

Once worth at least $55 billion, India's Anil Ambani has about a day to piece together $80 million to settle long-pending dues with a vendor or go to prison.

The development may mark a watershed moment in the relationship between the two brothers, who carved their separate businesses in 2005 with Mukesh Ambani getting the oil and petrochemicals business and Anil winning control of power, telecoms and financial services.

RCom under a debt of RS 46,000 crore, was close to selling its assets to Reliance Jio Infocomm (Jio) and Canadian asset management company Brookfield and use part of the proceeds of Rs 18,000 crore to repay its lenders and creditors including Ericsson.

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The threat of a prison term to Anil Ambani also came as a rare warning to some of India's richest borrowers whose firms have turned defaulters.

Rcom informed the exchanges that National Company Law Appellate Tribunal's (NCLAT) order in February restraining the "the sale, transfer or alienation of any movable or immovable property of" RCom and its units was another reason.

The SC bench, comprising Justices R F Nariman and Vineet Saran, said the three Reliance companies failed to adhere to the 120 days deadline and 60 days extra given by the apex court to pay the required amount to Ericsson. Banks had opposed release of the tax refunds.

Ericsson had moved a bankruptcy court in 2017 alleging it had not been paid dues of around Rs 1,600 crore after signing a deal in 2013 to operate, maintain and manage the telco's nationwide network.

Failure to keep this promise after a personal guarantee from Anil saw the situation escalate into a contempt case, with the court eventually setting the payment deadline.

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