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Homechevron_rightOpinionchevron_rightEditorialchevron_rightContempt verdict...

Contempt verdict against Anil Ambani

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Contempt verdict against Anil Ambani
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There is no mistaking in this: The Supreme Court verdict in the contempt of court case against controversial industry tycoon Anil Ambani,  is markedly historic and a correction to the industry of financial proxies.   In the litigation between Swedish electronics giant Ericsson and Reliance Communications,  the amount payable by Anil Ambani was to the tune of Rs 1,600 Crore. 

As per the agreement reached by the two companies in the court,  the liability was reduced to Rs 550 Cr,  and the Supreme Court order in October 2018 ordered Ambani to pay the amount by 15 December.   But Anil failed to pay up and sought refuge under a  pauper petition to evade paying the outstanding amount.  That tactic was foiled by the bench led by RF Nariman.  The court has now stated plain and simple that failing the settlement within four weeks,  he will be sentenced to three months in jail.   In addition to this,   the chairpersons of three Reliance companies of Anil have been fined Rs 1 Crore each for contempt of court,   and failing to pay that will send them also to jail for a month each.

The wording of the apex court's orders in the case between Ericsson and Anil Ambani has an unmistakable tone of disapproval of the disregard shown by Indian  corporate industrialists towards the legal system of the country.   It also reveals the  brazen violations of law and misuse of authority  by corporate entities.  The court,  which observed that Ambani and Reliance Communications had shown a 'cavalier attitude'  'to the highest court of the land',  refused to accept the unconditional apology of Ambani solely for this reason.   The two deadlines given earlier by the court for Reliance to pay Ericsson the agreed (downwardly revised by bilateral agreement) due of Rs 550 Cr,  was irresponsibly flouted by the three companies owned by Anil Ambani, i.e. Reliance Communications,  Reliance Telecom and Reliance Infratel.

The arguments made by Ericsson in the court to recover the arrears,  also unravels the unholy nexus of the Ambanis in the Rafale deal and banks.    The observation by Ericsson that Anil Ambani had the funds to invest in Rafale deal,  but lacked funds only to settle their dues,  was apparently taken at its face value by the court which rejected even Reliance's offer to pay the amount in stages.   Ericsson also poionts out that although the statement submitted by RCom to the Stock Exchange on 23 August 2018 states that its assets worth Rs 5,000 Cr were sold to Jio,  that amount had actually gone to State Bank of India (SBI).  And this allegation raised by counsel Dushyant Dave warrants detailed proble:   in the backdrop of criticisms about big ticket borrowers like Nirav Modi and Vijay Mallya borrowing money from nationalized banks illegally and under government pressure,  banks like SBI were colluding in scams in violation of  Supreme Court orders.

Also begging serious enquiry is the veracity of Anil Ambani's contention in the court that he became insolvent following the deal with elder brother Mukesh Ambani's Reliance Jio,  and therefore he had no way to pay the dues.   As per reports,   various companies owned by Anil Ambani are facing a financial crisis to the order of  Rs 40,000.  He pleads that nobody wants to buy his company's shares and that there was no co-operation from his brother Mukesh Ambani either.   That being so,  the deals signed with a so financially weakened Anil Ambani by Modi government and different state governments of BJP in the last few years,  are astounding. 

In BJP-ruled Maharashtra the rights to handle the insurance scheme of labourers involving an inevstment of Rs 60,000 Cr,  was granted last year to Anil ambani-owned Reliance Nippon Life Asset Management.   Currently,  employee provident fund of labourers in Maharashtra,  and provident fund of coal mines are also handled by Anil ambani's insurance firm.  In Jammu & Kkashmir a controversy was raised when the BJP-PDP coalition government had made it mandatory for government employees to subscribe to Reliance's insurance.   It was on top of it that Anil Ambani's firm earned a freebie of Rs 30,000 Cr through Modi's Rafale deal.   And Anil's power firm  which collapsed in the business of Mumbai's electricity network,  was rescued by a purchase deal by the prime minister's trusted industrialist Adani for a price of Rs 18,000 Cr.    In the light of the court verdict,  how Anil Ambani with a history of violations of law and abuse of power,  was able to procure a manufacturing contract in the Rafale aircraft deal,  is a question that the prime minister is bound to answer.  Especially so  when the defence company of Anil,  which is one of the firms that have filed for insolvency,  had  signed a contract of speed boats for coast guard, but failed to supply them after receiving the price.    Every citizen of the country is eagerly waiting to hear the answer to this question raised by Rahul Gandhi soon after the court verdict was issued.

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