Three Chinese banks are suing Anil Ambani in a London court for failing to pay back $680 million in defaulted loans.
The Industrial & Commercial Bank of China Ltd., China Development Bank and the Export-Import Bank of China agreed to loan $925.2 million to Anil Ambani’s firm Reliance Communications Ltd. in 2012 on condition that he provide a personal guarantee, ICBC’s lawyer Bankim Thanki told the court. Some repayments were made by the wireless carrier but in February 2017, it defaulted on its payment obligations.
The embattled Indian tycoon says that while he agreed to give a non-binding “personal comfort letter,” he never gave a guarantee tied to his personal assets — an “extraordinary potential personal liability.” He’s the brother of Mukesh Ambani, who’s worth $56 billion and is the wealthiest man in Asia and 14th richest in the world. Anil, on the other hand, has seen his personal fortune dwindle over recent years, losing his billionaire status.
ICBC “failed and continues to fail, to distinguish between Mr. Ambani on the one hand, and the company to whom the loans were being extended…on the other,” Ambani’s lawyer Robert Howe said in a court filing.
#Data is the new #Oil. The Indian market is only second to #China’s in terms of its offerings. In #DataSecurity #India has one of the poorest regulations and protections. A combination good for China, less so for us. #TradeWar https://t.co/RJXaJ9xTdG
— GreatGameIndia (@GreatGameIndia) October 21, 2019
Anil Ambani was chairman of Reliance Communications, which fell into administration earlier this year. His wider telecommunications-to-infrastructure empire Reliance Group has continued to struggle under a mountain of debt. As of July, four of its biggest units, excluding the phone company, had about 939 billion rupees ($13.2 billion) of debt, Bloomberg reported in September.
Anil Ambani was caught up in a similar case earlier this year, when India’s Supreme Court threatened him with prison after Reliance Communications failed to pay to pay 5.5 billion rupees to Ericsson AB’s Indian unit. The judges gave him a month to find the funds, and his brother, Mukesh, stepped in to make the payment.
The brothers’ relationship has been fraught since their father’s death left behind a vast empire that was split between them. While Mukesh’s oil and petrochemicals businesses have flourished, Anil’s assets dwindled.
Motech Software – How Reliance stashed #BlackMoney in Swiss Banks & later snapped all ties with shell firm after money laundering probe initiated. The biggest Indian account holder with nearly USD 500 million in Geneva branch, its website now hosts porn.https://t.co/f875nwzOsH
— GreatGameIndia (@GreatGameIndia) September 28, 2019
According to a court filing, Anil went to Beijing in the winter of 2011 to negotiate the loan with ICBC’s former Chairman Jiang Jianqing directly. The lenders sought a share pledge before granting the loans, but the legal dispute centers on whether Ambani or one of his associates went on to provide a personal guarantee as security.
Hasit Shukla, Reliance’s commercial and treasury head, signed a personal guarantee on Ambani’s behalf by power of attorney when the loan was set up seven years ago, Thanki said. But Ambani didn’t give Shukla the authority to sign for him, making the guarantee non-binding, his lawyer Robert Howe said in written submissions.
“Mr. Ambani’s position is that the claim made by ICBC in relation to his alleged personal guarantee for loans to RCOM is without merit,” a spokesman for the tycoon said in an email. Industrial & Commercial Bank is the sole claimant in the London case, and is representing itself and the other two lenders.
US has put sanctions on several Chinese companies for shipping Iranian oil, putting dozens of Supertankers off limits to energy traders. As a direct impact of blacklisting of Chinese shipping company Cosco 145,000 tonnes of Indian Oil is at risk. #TradeWarhttps://t.co/3mkR2yPa4D
— GreatGameIndia (@GreatGameIndia) September 26, 2019
“This is a straightforward debt claim to recover outstanding loans made to RCOM in good faith, and secured by a personal guarantee given by Mr. Anil Ambani,” the banks said in a statement.
In Thursday’s court hearing, ICBC’s lawyers asked Judge David Waksman for an early ruling or a conditional order requiring Ambani to pay into court the unpaid sum and interest under the facility agreement. Ambani has declined to give any evidence of his wealth, they said.
Ellen Milligan and Jonathan Browning for Bloomberg. Send in your tips and submissions by filling out this form or write to us directly at the email provided.
GreatGameIndia is a journal on Geopolitics and International Relations. Get to know the Geopolitical threats India is facing in our exclusive book India in Cognitive Dissonance. Join us on Telegram for more intel and updates.
