Home Business Chinese banks sue Anil Ambani over default

Chinese banks sue Anil Ambani over default


NEW DELHI: Three Chinese banks are suing Reliance Group chairman Anil Ambani in a London court for failing to pay back $680 million in defaulted loans. The Industrial & Commercial Bank of China Ltd, China Development Bank and the Export-Import Bank of China agreed to loan $925.2 million to Anil Ambani’s firm Reliance Communications Ltd in 2012 on condition that he provide a personal guarantee, ICBC’s lawyer Bankim Thanki 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”. Anil has seen his personal fortune dwindle over recent years, losing his billionaire status. His brother, Mukesh Ambani, worth $56 billion, is the wealthiest man in Asia and 14th richest in the world.

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ICBC “failed and continues to fail, to distinguish between Anil Ambani on the one hand, and the company to whom the loans were being extended…on the other”, his lawyer Robert Howe said in a court filing.

Anil Ambani was chairman of RCom, which fell into administration earlier this year. His wider telecommunications-to-infrastructure empire Reliance Group has continued to struggle under a mountain of debt. As of July, four of its biggest units, excluding the phone company, had about $13.2 billion of debt, Bloomberg reported in September.

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 Anil Ambani,” the banks said in a statement.

In Thursday’s court hearing, ICBC’s lawyers asked Judge David Waksman for an early ruling or a conditional order requiring Ambani to pay into court the unpaid sum and interest under the facility agreement. Ambani has declined to give any evidence of his wealth, they said.

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