Reliance Group Chairman Anil Ambani has pleaded poverty in his dispute with three Chinese banks seeking $680 million in defaulted loans. “The value of my investments has collapsed,” Anil Ambani said, according to a court filing by the banks in a London lawsuit.

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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, his lawyers told the UK court on Friday. They are fighting a bid by top Chinese banks to recover $680 million from the Indian businessman.

“The current value of my shareholdings is down to approximately $82.4m 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,” Anil Ambani stated.

The Industrial and Commercial Bank of China Ltd Mumbai Branch, on behalf of itself, China Development Bank and Exim Bank of China, had sought summary judgment against Anil Ambani over an alleged breach of a personal guarantee on a debt refinancing loan of around $925 million in February 2012. Anil Ambani denies providing authority for any such guarantee, resulting in the High Court action in the UK -- the jurisdiction agreed to as part of the terms of the loan agreement.

The 60-year-old is the brother of Mukesh Ambani, who’s worth $56.5 billion and is the wealthiest man in Asia. Anil Ambani, on the other hand, has seen his personal fortune dwindle over recent years, losing his billionaire status. His Reliance Communications filed for bankruptcy last year. The banks asked Judge David Waksman to force Anil Ambani to put up $656 million into the court’s account.

At the hearing at the Commercial Division of the High Court of England and Wales in London to set the terms for the "conditional order" granted to three Chinese banks last year against the Reliance Communications (RCom) boss, his legal team sought to establish that his net worth was zero once his liabilities were taken into account.

"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," notes his defence.

"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," said his barrister Robert Howe.

Lavish lifestyle

The banks' counsel called Anil Ambani's claims into question and repeatedly referred to his "lavish lifestyle", involving access to 11 or so luxury cars, a private jet, a yacht and rent-free access to the exclusive Seawind penthouse in South Mumbai.

"So, Ambani's assertion is that he is massively personally insolvent, is bankrupt. Has he filed for bankruptcy in India," questioned Justice David Waksman during the course of the half-day hearing.

Anil Ambani's legal team, including leading Indian lawyer Harish Salve, responded in the negative, followed by a brief reference in court to India's Insolvency and Bankruptcy Code (IBC) only recently coming into play. At the end of the hearing on Friday, the judge indicated that he will hand down his judgment later in the day.

The Chinese banks, represented in court by barrister Bankim Thanki, sought to establish that Anil Ambani had been "at best economical with the truth" in his evidence statements to the court in relation to his financial means.

They also pointed to a series of instances where Ambani family members had stepped in to bail him out, even as Anil Ambani's defence sought to establish that their client had no access to the assets and shares under the name of his mother Kokila, wife Tina Ambani and sons Anmol and Anshul in the form of loans.

"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," said Thanki, who claimed Anil Ambani's evidence was akin to the proverbial "glossy lipstick on the collar" in terms of some "blatant" lies despite the burden of proof lying with him in the case.

With inputs from agencies.

First Published:Feb 7, 2020 8:57 PM IST