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RCom loan default case: Anil Ambani tells London court his net worth is 'zero'

Case pertains to a loan worth $925 million given to Ambani's now bankrupt Reliance Communications in February 2012; RCom repaid a portion of the loan, but defaulted on its payment obligations in February 2017

twitter-logoBusinessToday.In New Delhi Last Updated: March 17, 2020 | 08:59 IST
RCom loan default case: Anil Ambani tells London court his net worth is 'zero'
Reliance Group Chairman Anil Ambani

Reliance Group Chairman Anil Ambani has expressed his inability to pay dues worth $680 million (over Rs 4,860 crore) in defaulted loans to three Chinese banks, saying he doesn't hold "meaningful assets" that can be liquidated and his net worth is "zero". The Chinese banks -- Industrial & Commercial Bank of China Ltd., China Development Bank and the Export-Import Bank of China -- in a lawsuit filed in a London court said Ambani should be ordered to deposit the amount in court's account. Industrial and Commerical Bank of China (ICBC) is the sole claimant in the case before UK High Court and is representing the other two lenders.

The case pertains to a loan worth $925 million given to Ambani's now bankrupt Reliance Communications in February 2012. RCom repaid a portion of the loan, but defaulted on its payment obligations in February 2017.

ALSO READ:Anil Ambani's sons Anmol, Anshu step down from Reliance Infra board

In response to the lawsuit, Ambani said the overall value of his investments had collapsed. "The current value of my shareholdings is down to approximately $82.4 million and my net worth is zero after taking into account my liabilities. In summary, I do not hold any meaningful assets which can be liquidated for the purposes of these proceedings," he was quoted as saying in a court filing disclosed on Friday.

Meanwhile, a spokesperson for Anil Ambani said: "Mr Ambani is reviewing the order of the UK Court and will take legal advice as to further remedies in appeal. The order pertains to an alleged personal liability of Mr Ambani and will have no bearing on the operations of the Reliance Infrastructure Limited, Reliance Power Limited and Reliance Capital Limited."

In their argument, the Chinese banks said Ambani gave "personal guarantee" for the debt, while the embattled businessman -- in a bid to avoid depositing the pending dues ahead of the trial -- said he only gave "personal comfort letter" not the "extraordinary potential personal liability", which would have tied his personal assets to the loans.

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Ambani's lawyer Robert Howe said Judge David Waksman should not order him to deposit $656 million into the court's account as he was not in position to do so. Attorney Bankim Tanki, who was representing the Chinese banks, termed Ambani's statements as "opportunistic" attempts.

Anil Ambani had told the court in a filing that he would not be able to raise funds from outside resources, including his elder brother Mukesh Ambani, the richest man in Asia. His lawyer had earlier told the court that after the events during the court proceedings, Anil Ambani's relatives would not lend money to him.

The UK court in December 2019 had dismissed an application for a summary judgment by the Chinese banks on their claim against Anil Ambani. The court, however, passed a conditional order on the basis that Ambani's defence against the claim, "while possible", was "improbable". His legal team was also told to submit further evidence in his defence and prove the claim by Chinese lenders holds no merit.

This is not the first time when Anil Ambani showed inability to repay funds. Last year, the Supreme Court had threatened to put him in jail in another case involving pending dues worth $550 crore to Swedish telecom equipment maker Ericsson AB. Later, his brother and Reliance Industries Chairman Mukesh Ambani saved him by making the payment.

ALSO READ:Forensic audit finds no misappropriation of funds in Reliance Home Finance

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