From 6th Richest In World To Bankruptcy! Anil Ambani Tells UK Court His Net Worth Is 'Zero'

The story of Anil Ambani will probably go down in history as an unparalleled one. While there are any number of rags to riches stories, how Anil Ambani went on from being the sixth richest man in the world to being bankrupt could be one of a kind.

On Friday Anil, the younger brother of India's richest man, Mukesh Ambani told a UK court that his ¡°net worth was zero¡± and that he was bankrupt. The younger Ambani is being sued by three Chinese banks, Industrial and Commercial Bank of China Ltd (ICBC), China Development Bank and the Export-Import Bank of China for a loan default of over $700 million (around Rs 5,000 crore) by Reliance Communications (RCom).

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RCom, which was one of the pioneers in mobile communication in India has since run out of business and in 2019 filed for bankruptcy. It has an estimated debt of ? 50,000 crores against assets worth ?18,000 crores.

"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 the spectrum," Ambani's legal team told the court. "Whereas Mr. Ambani's investments were worth more than USD 7 billion in 2012, they are now worth USD 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.

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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, 60, denies providing authority for any such guarantee, resulting in the High Court action in the UK ¨C the jurisdiction agreed to as part of the terms of the loan agreement.

The banks' counsel called 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.

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"So, Mr. 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. They also pointed to a series of instances where Ambani family members had stepped in to bail him out, even as 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.

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"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 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.

The court, however, rejected 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" and directed him to pay USD 100 million within six weeks towards a conditional order granted to three Chinese banks.

This is not the first time, Anil whose Reliance Defence has been awarded the offset contract for Rafale fighter jets has expressed his inability to pay off his past debts.

Last year, the Supreme Court had threatened to put him in jail if he failed to pay the pending dues worth Rs 550 crore to Swedish telecom equipment maker Ericsson AB. Later, his brother and Reliance Industries Chairman Mukesh Ambani saved him by making the payment.