A UK court on Friday directed Reliance Group chairman Anil Ambani to pay USD 100 million within six weeks towards a conditional order granted to three Chinese banks pursuing the recovery of over USD 680 million owed to them as part of a loan agreement.
In what is in effect a deposit to be paid into court pending a full trial in the case, Judge David Waksman has set a six-week timeline for such a payment to be made as he concluded that he did not accept Ambani’s defence that his net worth was nearly zero or that his family would not step in to assist him when “push came to shove”. “In my overall conclusion, Mr Ambani has not satisfied me that he can’t make any payment at all,” Judge Waksman said as he expressed particular criticism of a “lack of candour” and “transparency” on the part of Ambani’s defence in reference to his financial means.
“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,” the spokesperson said.
The banks – Industrial and Commercial Bank of China Ltd Mumbai Branch, on behalf of itself, China Development Bank and Exim Bank of China – welcomed the order and said they remain confident of their claim succeeding at trial.
“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,” a statement on behalf of the banks said. “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 statement said.
Earlier, during a half-day hearing, the court was told 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. The Chinese banks had sought summary judgment against Ambani over an alleged breach of a personal guarantee on a debt refinancing loan of around USD 925 million in February 2012. 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.