Brother of Asia's richest man pleads poverty in lawsuit

Indian tycoon Anil Ambani was told to set aside US$100 million (S$139 million) in his dispute with three Chinese banks.
Indian tycoon Anil Ambani was told to set aside US$100 million (S$139 million) in his dispute with three Chinese banks.

LONDON • The brother of Asia's richest man was ordered to set aside US$100 million (S$139 million) in his dispute with three Chinese banks, even as he pleaded poverty.

"The value of my investments has collapsed," Mr Anil Ambani said, according to a London court filing by banks seeking around US$700 million in defaulted loans. "My net worth is zero after taking into account my liabilities. In summary, I do not hold any meaningful assets which can be liquidated for the purposes of these proceedings."

The lawsuit was filed by three state-controlled Chinese banks, which argue that they provided a loan of US$925 million to Mr Ambani's Reliance Communications in 2012 with the condition that he personally guarantee the debt. Mr Ambani's comments were disclosed as he tried to avoid depositing hundreds of millions of dollars with the court ahead of a trial.

Last Friday, Judge David Waksman ordered Mr Ambani to put up US$100 million into the court's account within six weeks. Mr Ambani plans to appeal.

The embattled Indian tycoon said that while he agreed to give a non-binding "personal comfort letter", he never gave a guarantee tied to his personal assets - an "extraordinary potential personal liability".

The 60-year-old is the younger brother of Mr Mukesh Ambani, who is worth US$56.5 billion and is the wealthiest man in Asia. Mr Anil Ambani, on the other hand, has seen his personal fortune dwindle over recent years, losing his billionaire status. His Reliance Communications filed for bankruptcy last year.

Mr Ambani has "clearly got more assets and income than he's letting on", the judge said. "What I'm dealing with is an extraordinarily wealthy family who have helped each other in the past."

Mr Bankim Thanki, an attorney representing Industrial and Commercial Bank of China, China Development Bank and the Export-Import Bank of China, said in a filing that Mr Ambani's statements are "plainly a yet further opportunistic attempt to evade his financial obligations to the lenders". The banks said in a statement: "We hope that Mr Ambani will comply with the court's order and look forward to the swift resolution of the case at trial."

Mr Ambani was caught up in another legal wrangle last year when India's Supreme Court threatened him with jail after Reliance Communications failed to pay 5.5 billion rupees (S$107 million) to Ericsson's Indian unit. His brother Mukesh stepped in just in time to make the payment.

The brothers' relationship has been fraught since their father died, leaving behind a vast empire that was split between them. While the elder brother's oil and petrochemical businesses have flourished, the younger brother's assets dwindled.

Mr Anil Ambani said in a filing that he recognised the judge would want to know if he could satisfy any order to put up funds from outside resources, including his family. "I can confirm that I have made inquiries but I am unable to raise any finance from external sources," he said.

The judge had said in an earlier ruling that he believed Mr Ambani's defence would be shown to be "opportunistic and false".

Mr Ambani's lawyer Robert Howe told the judge that as a result of the comments, the tycoon's relatives were unlikely to lend any funds. There is a "very substantial risk they will never get it back", said the lawyer.

Mr Ambani's representatives said: "The order pertains to an alleged personal liability of Mr Ambani and will have no bearing on the operations of the Reliance Infrastructure, Reliance Power and Reliance Capital."

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A version of this article appeared in the print edition of The Straits Times on February 10, 2020, with the headline 'Brother of Asia's richest man pleads poverty in lawsuit'. Print Edition | Subscribe