Financial news

Anil Ambani claims ‘zero’ wealth in debt recovery case

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Via Financial Times

Anil Ambani, the Indian tycoon who was once one of the world’s richest people, claimed he was worth “zero” on Friday as China’s biggest bank seeks to recover hundreds of millions of dollars in unpaid debt.

Industrial and Commercial Bank of China is suing Mr Ambani in London on behalf of a consortium of creditors to reclaim loans made in 2012 to his now-bankrupt telecoms company Reliance Communications, which they say he personally guaranteed.

Mr Ambani denies making any such guarantee, claiming that he was providing nothing more than a non-binding “comfort letter” when he signed the deal.

At a pre-trial hearing in which ICBC sought an order requiring Mr Ambani to pay $656m into court ahead of the High Court trial, his lawyers said he did not have the means to pay because his fortune had plummeted.

They said the value of Mr Ambani’s investments had dropped below $100m from more than $7bn in 2012, leaving him with a net worth of zero once his liabilities were taken into account.

“His main wealth by far, and a huge proportion of his investment, was in his business,” Robert Howe QC told the court.

Mr Ambani was once ranked by Forbes among the world’s sixth-richest people, after dividing his father’s corporate empire with elder brother Mukesh in 2005 following a public falling out between the siblings.

But while Mukesh has cemented his status at the top of Asia’s rich list with a fortune of roughly $56bn, Anil’s wealth has crumbled as his businesses struggled, with RCom entering bankruptcy proceedings last year.

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Lawyers for ICBC argued that the court should reject Mr Ambani’s claim of poverty, pointing to everything from a collection of luxury vehicles to the enormous wealth of his extended family as evidence he can secure funds.

“His lifestyle speaks volumes,” Bankim Thanki QC, acting for ICBC and the banks, told the court. “He still has access to a fleet of cars, aircraft and lives in an apartment in one of the most exclusive parts of Mumbai.”

Mr Ambani’s lawyers said he did not own or have beneficial interest in the vehicles or other assets in question.

Mr Justice Waksman ruled Mr Ambani should pay $100m into court after he rejected the submissions from Mr Ambani’s lawyers.

“He’s clearly got more assets and income than he’s letting on . . . and family members have helped out before and can and will assist.”

Mukesh Ambani last year bailed out Anil when the younger brother was facing jail in India over unpaid debt of $77m to Swedish telecoms group Ericsson, a move that seemed to draw a line under the dispute between the pair.

Mr Howe told the court on Friday it was “improbable” any of Anil Ambani’s family would put up such an “absolutely huge amount of money” when it was unlikely the $656m “would ever be returned” if Mr Ambani eventually lost the High Court litigation.

Mr Ambani is reviewing the $100m order and seeking legal advice, a spokesperson said.

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