Chinese Banks Face Increased Litigation To Recover Anil Ambani Dues
The Chinese banks, which are planning to move Indian courts to enforce a $717 million payment ordered by UK courts from Anil Ambani, are facing an additional legal hurdle, with State Bank of India moving the National Company Law Tribunal (NCLT) Delhi bench to enforce personal guarantees of Ambani.
SBI’s move comes after almost two years of Reliance Communications was first sent to the NCLT (National Company Law Tribunal) for recovery of dues by Indian creditors.
Corporate lawyers said the move by the latest SBI will delay recovery of dued by the Chinese banks which won the UK court order in May this year. The Chinese banks had invoked personal guarantees given by Ambani to avail of foreign loans by RCom but Ambani had refused to pay the money arguing he never gave any personal guarantees.
ALSO READ: SBI knocks on NCLT's doors to recover Rs 1,200 cr from Anil Ambani
Both SBI and Chinese banks will have a tough time recovering funds from Ambani considering that he has already submitted to the British court that his net worth is zero. Most of the stake held by Ambani in his Indian companies are already pledged with banks.
“With the SBI now litigating on the personal guarantee issue of Ambani, there will be lots of litigation awaiting the Chinese banks and they will have to wait longer,” said a Mumbai based lawyer.
State Bank of India has close to Rs 15,000 crore of exposure in the three Reliance Communications group companies, and is not receiving any dues from the Ambani companies after it agreed to sign a “standstill” agreement in June 2017.
When contacted, a spokesperson of Anil Ambani said: "The matter relates to a corporate loan availed by Reliance Communications Limited (RCom) and Reliance Infratel Limited (RITL) and is not a personal loan of Ambani."
RCom and RITL resolution plans were approved by 100 per cent of their lenders in March this year and these plans are awaiting the approval of NCLT, Mumbai.
“Ambani will file suitable replies, and the NCLT has not given any relief to the petitioner," the spokesperson said.
ALSO READ: Mistry questions Tata's performance, says group's loss at Rs 13K-cr in 2019
As per the UK Court Order, the final amount owed under the alleged guarantee will be assessed based on the outcome of the RCom resolution plan filed before NCLT, Mumbai, the ADA officials had said earlier when Chinese banks had won the order in May.
The company had to shut down its business operations as a result of high debt and a failed merger with Aircel. RCom has been admitted to NCLT.
Reliance Industries and UV ARC have emerged as the preferred bidder for RCom companies. UV ARC won the race to acquire RCom and its subsidiary, Reliance Telecom Infrastructure Ltd. At the same time, RIL won the race for Reliance Infratel for a total consideration of around Rs. 23,000 crore (out of total consideration Reliance Jio will pay Rs. 4,700 crore) to be payable over the next seven years.
JPMorgan Deploys AI Chatbot To Revolutionize Research And Productivity
JPMorgan has deployed an AI-based research analyst chatbot to enhance productivity among its workforce, with approximate... Read more
Private Equity And Banks: The Complex Web Of Leverage
Private equity has emerged as a significant force in the global financial landscape, driving substantial growth and inve... Read more
Financial Watchdog Highlights Unresolved Vulnerabilities In Shadow Banking Sector
The world’s leading financial stability watchdog has issued a warning about the unresolved vulnerabilities within the ... Read more
JPMorgan And Small Caps Lead Market Rally: A Sign Of Economic Optimism
In a week marked by strong financial performance, JPMorgan Chase & Co. reported a 25% rise in profits, and US small-... Read more
Big Banks Vs. Regional Banks: The Battle For Market Share
The financial industry is a competitive landscape where big banks and regional banks vie for market share. Each type of ... Read more
The Evolution Of Philanthropic Advisory Services In Private Banks
The landscape of philanthropic advisory services provided by private banks has undergone a significant transformation. T... Read more