Trouble Call

The Ericsson case is just a small irritant among Anil Ambani’s many problems

- K. Sunil Thomas

WHO WOULDN’T WANT to be like Anil Ambani! One of the richest Indians, he is married to an erstwhile movie star, and is the toast of the A-list social circuit.

Would you really want to be like Anil Ambani? His wealth may seem impressive at a reported $1.2 billion; but he was ten times richer just about a decade ago. There is a plethora of cases against him and his companies, filed by corporate clients to banks to ministries. On February 20, the Supreme Court shocked India Inc by holding Ambani guilty of contempt of court, just a few days after he took his flagship telecom company, Reliance Communications (RCom), into bankruptcy courts. The court gave him four weeks to pay up the due of 453 crore to the Swedish telecom company Ericsson, or go to jail.

The past several months have not been good for Ambani; yet the court conviction was an especially hard blow. He was refused exemption from appearing in the court. Many people thought he would immediately pay up and move on with the pressing task of rescuing his crises-ridden company. Surprisingly, he has not done that (other than the 118 crore he deposited earlier as part payment) even three weeks after the Supreme Court direction.

Many of his businesses, and corporate assets, are now tied up in courts and by the lenders. His companies owe the lenders some 40,000 crore. His lenders, led by State Bank of India, now have a say in all his financial moves, and it is said that they have not always been helpful in his efforts to raise funds. Some other creditors, like HSBC Daisy Investments, have now approached the Supreme Court demanding their dues. Ambani, meanwhile, has filed cases against Edelweiss and L&T Finance for selling pledged shares; Edelweiss has returned the favour with a defamation notice.