Supreme Court will hear State Bank of India's plea against Anil Ambani today. SBI had filed a petition invoking the personal guarantees of Ambani. The outcome of this hearing will be keenly watched as Ambani's is the first case where personal guarantees of a promoter have been invoked.
Anil Ambani had objected to the invocation of personal guarantees under the Corporate Debtors Regulations, 2019. The IBC had covered only Indian companies and not promoters till November last year. The new rules are applicable against personal guarantees against loans above Rs 1,000 crore or more.
The SBI also invoked the personal guarantees of Sanjay Singhal, promoter of Bhushan Power and Steel on September 7. The company had defaulted on loans worth Rs 48,000 crore.
State Bank of India had invoked personal guarantee against Anil Ambani in January 2018 and issued a notice to him. The Ambani scion has failed to repay the loans despite various reminders by the bank. The lender had provided credit facilities of Rs 565 crore and Rs 635 crore to the now insolvent Reliance Communications (RCom) and Reliance Infratel (RITL) respectively in 2016.
Anil Ambani had provided personal guarantees for the loans that together amount to Rs 1,200 crore under a Personal Guarantee Deed in September 2016. Both RCom and RITL had defaulted on their loans and their accounts were declared as non-performing accounts (NPAs) with effect from August 2017.