Three Chinese banks have sued Anil Ambani who is the brother of the richest man of Asia. He has been dragged to the London court for not paying the 680$ million loan.
The Industrial & Commercial Bank of China Ltd., China Development Bank and the Export-Import Bank of China provided a loan of $925.2 million to Anil Ambani’s firm Reliance Communications Ltd. In 2012, on a condition that he will provide personal guarantee, his lawyer 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.
Anil Ambani was the chairman of Reliance communications. His company was struggling the debt burdens. 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.
This was not the first time when he has been dragged to court, earlier this year, he was sued for the similar case. When supreme court of India threatened him to prison if his company fails to pay 5.5 billions to Ericsson AB’s Indian unit. The judges gave him a month to find the funds, and his brother, Mukesh, cleared the payment.
The brothers were not sharing a goo relationship after their father died. As he left lots of properties which was to be shared by them. Mukesh Ambani’ business of oil and petrochemicals was flourishing, but the Anil’s business got doomed.
As per a court filing, In 2011, in beijing, Anil ambani negotiated a 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, had to sign a personal guarantee on Ambani’s behalf by power of attorney seven years ago to take the loan, Thanki said. His lawyer Robert Howe said in written submissions, that the Anil Ambani never authorized him to sign for him, which makes the guarantee non binding.
“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.
“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.