On 7th February, 2020 a UK Court ordered Reliance Group Chairman Anil Ambani to deposit a sum of $100 million within six months as a conditional order granted to three Chinese banks i.e. Industrial and Commercial Bank of China Ltd Mumbai, China Development Bank and Exim Bank of China as he owes $680 million to the banks as the part of a loan agreement.
Judge David Waksman set the time of six weeks for the payment of the amount in the court as he denied believing that Ambanis net worth is nearly zero and his family cannot help him when the push came to shove. The Judge while criticising Ambanis lack of candour and transparency about his income said that "In my overall conclusion, Mr. Ambani has not satisfied me that he can't make any payment at all."
Ambani also insinuated that he is planning to go for appeal against the order which requires following the process of seeking permission to appeal.
The spokesperson from Ambanis side said that "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."
While accepting the decision of court, the banks said, "This is a straightforward debt claim to recover outstanding loans made to RCom (Reliance Communications) in good faith and secured by a binding personal guarantee given by Mr Ambani, which he has refused to honour," "We remain very confident in our claim. We hope that Mr Ambani will comply with the court's order and look forward to the swift resolution of the case at trial,"
The banks also asked for the summary judgement against Ambani over the breach of personal gurantee on a debt of about $925 million in 2012.
During the half-day hearing, it came to the knowledge of court that Reliance Group chairman Anil Ambani was a wealthy businessman and now he is not as a result of a "disastrous turn of events" in the telecom market in India.
Ambani denied giving any gurantee which resulted into the high court action in UK (Jurisdiction agreed as the term of loan agreement). While the Commercial Division of the High Court of England and Wales in London was hearing the matter of terms for the "conditional order" granted to three Chinese banks last year against the Reliance Communications (RCom) boss, Ambanis legal team established that his net worth was nearly zero once we also take his liabilities into consideration.
His defence attorney, Robert Howe said that "The value of Mr Ambani's investments has collapsed since 2012. The Indian telecom sector in particular has been dramatically hit by the Indian government's change of policy in relation to the grant of spectrum," "Whereas Mr Ambani's investments were worth more than $7 billion in 2012, they are now worth $89 million, and his net worth is zero once his liabilities are taken into account... Quite simply, he was a wealthy businessman, now he is not."
Barrister Bankim Thanki, arguing for the banks' side said that Ambani has been in his best economic condition. He also pointed out instances where his family stepped in and helped him. He said that "Are we seriously to believe that his own mother, wife, and sons can't help him in his hour of need for the purpose of complying with a conditional order."
On December 2012, when the UK High Court dismissed the plea of Industrial and Commercial Bank of China Limited for a 'summary judgement' for their claim of $680 million against Ambani, RComs spokesperson said that "Ambani was confident that he will have an opportunity to place the necessary evidence before the UK High Court, in the course of the trial to establish that Chinese banks claim are without any merit".
Author Aditi Dubey
