A UK court on Friday directed Reliance Group Chairman Anil Ambani to pay $100 million within six weeks towards a conditional order granted to three Chinese banks pursuing the recovery of over $680 million as part of a loan agreement.
In what is, in effect, a deposit to be paid to court pending a full trial in the case, Judge David Waksman has set a six-week timeline for such a payment as he concluded that he did not accept Ambani’s defence that his net worth was nearly zero, or that his family would not step in to assist him when “push came to shove”.
Earlier, Ambani had pleaded poverty in his dispute with the three Chinese banks . “The value of my investments has collapsed,” Anil Ambani said, according to a court filing by the banks in a London lawsuit. “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.”
The lawsuit was filed by the three Chinese banks, which argued that they had provided a loan of $925 million to RCom in 2012, on condition that he personally guarantee the debt. The comments were disclosed on Friday as Ambani sought to avoid depositing funds with the court ahead of a trial.
A spokesperson for Ambani said he was reviewing the Order of the UK Court, and would take legal advice as to further remedies in appeal. “The Order pertains to an alleged personal liability of Ambani and will have no bearing on the operations of the Reliance Infrastructure, Reliance Power and Reliance Capital.”
The tycoon said 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 has seen his personal fortune dwindle in recent years, losing his billionaire status. His Reliance Communications filed for bankruptcy last year.
The banks asked the judge to force Ambani to put up the full amount of the debt “or such other sum as the court consider appropriate” while litigation continues, according to their court filings. Representatives of Ambani’s Reliance Group said on Friday they couldn’t immediately comment. They said the group would issue a statement after the final order. According to the banks, Ambani argued that he was unable to make any payments and that an order requiring him to do so would hinder his ability to defend himself in the case.
Bankim Thanki, an attorney representing Industrial & Commercial Bank of China, China Development Bank, and the Export-Import Bank of China, said in a filing that Ambani’s statements were “a yet further opportunistic attempt to evade his financial obligations”. Ambani was caught up in another legal wrangle last year, when the SC threatened him with prison after RCom failed to pay to pay ~550 crore to Ericsson’s Indian unit. The judges gave him a month to find the funds, and his brother stepped in to make the payment. Anil said in a filing that he recognised that the judge would want to know if he could satisfy any order to put up funds from outside resources including family. “I can confirm that I have made enquiries but I am unable to raise any finance from external sources,” he said.