Asia News Sep 29

Anil Ambani: From an Indian tycoon to a fallen star

After years of fending off creditors and trying to pull his debt-saddled business empire out of the brink, this once sixth-richest billionaire is now fighting to save himself from going down under

Anil Ambani: From an Indian tycoon to a fallen star
Indian tycoon Anil Ambani attends the annual general meeting of Reliance ADAG Companies in Mumbai on September 30, 2019. Photo: AFP

(ATF) Back in 2008 when Forbes magazine listed Anil Dhirubhai Ambani as the world's sixth-wealthiest person, he had the world at his feet. But 12 years later, as three Chinese banks enforce their rights on his global assets in a London court to recover dues, the 61-year-old is fighting to save his reputation.

The brother of Asia’s richest man, Mukesh Ambani, the Reliance Industries scion has even pleaded that he is on the edge of bankruptcy, claiming that he is penniless and living off his wife and family.

According to media reports, the Industrial and Commercial Bank of China, Export, Import Bank of China, and China Development Bank have decided to pursue their rights and take enforcement action against Anil Ambani's worldwide assets to recover their debt.

The dispute arose over a loan the three banks gave to Reliance Communications (RCom) in 2012 for $925 million. RCom initially began repaying the loan before defaulting.

The lenders claim the former chairman of RCom provided a personal guarantee for the loan.

READ MORE: Anil Ambani faces heat from Chinese banks

Although Ambani denied that the guarantee was binding on him, the London Court on May 22 upheld that the banks had established their claim that it was “far and beyond the standard of the balance of probabilities”.

By June, the debt he owed, after factoring in the past repayment and accrued interest, had risen to $717.67 million.

The Chinese banks, however, cannot pursue enforcement against Ambani's assets in India owing to various insolvency proceedings against him by local lenders, who have managed to extract a stay-order from the Delhi High Court against all claims by foreign lenders.

Fall from grace

While the UK court’s order has come as a surprise, the fall of Ambani had been expected over the past five years, when the growth rate of his ventures began plummeting and debt on some ventures started soaring.

This gradual process translated decay for Anil Ambani’s success story while his personal wealth eroded. Eventually, last year, a ruling came from the Indian Supreme Court that announced a warning of jail time for Ambani unless one of his ventures, Reliance Communications, paid off a debt of $77m.

This humiliation was fended off when his elder brother, Mukesh Ambani, came to the rescue and paid off the debt along with interest.

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Following the death of his father Dhirubhai Ambani, Ambani took over the helm of Reliance Group in 2002. Currently, he is the chairman of Reliance Group, a conglomerate that includes well-known and stock-listed names such as Reliance Capital, Reliance Infrastructure, Reliance Power, Reliance Communications and many other diverse ventures.

Ambani, was declared as the sixth richest man in the world with a net worth of $48bn in 2008, but in 2019 his net worth was declared to have fallen to $500m.

Devoted and spiritual

On June 29, the UK High Court asked Ambani to file an affidavit listing his worldwide assets and whether or not they were in his own name.

However, in the hearing of that order last week, Ambani claimed that contrary to exaggerated perceptions of his flamboyance and lavish lifestyle, he has always been a simple man of simple tastes.

According to his spokesperson: "He is devoted to his family and company; an avid marathon runner; and deeply spiritual. He is also a lifelong vegetarian, teetotaller and non-smoker who would much rather watch a movie at home with his kids than go out on the town”

“Reports that suggest otherwise are completely misleading," added the spokesperson.

  • With reporting from The Times of India.

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