MUMBAI: A UK court has ordered Reliance Group chairman Anil Ambani to pay $717 million (Rs 5,448 crore) to three Chinese banks within 21 days, after ruling that a personal guarantee which the Indian businessman had disputed was binding.
A spokesperson for Anil Ambani said he was seeking legal advice on the future course of action. “As far as the judgment of the UK court is concerned, the question of any enforcement in India does not arise in the near future,” the spokesperson said in a statement.
The UK order will also not have any bearing on the operations of other Reliance Group companies – Reliance Infrastructure, Reliance Power and Reliance Capital, the statement said.
Legal experts, however, said if Ambani didn’t pay in the next 21 days, the lenders would have the option to “pursue all available options for enforcement of order”, which could include “going after his personal assets and wealth”.
Justice Nigel Teare of the Commercial Division of the High Court of England and Wales in London in his order earlier this week also asked Ambani to pay another 750,000 pounds as court costs.
‘Amount to be less after resolution’
The judge also vacated a trial date in the case previously set for March 18 next year.
The latest direction is the outcome of the legal route taken by three Chinese banks — Industrial & Commercial Bank of China Ltd, China Development Bank and Export-Import Bank of China — which had sued Ambani in London for allegedly failing to repay $708 million of loans, including interests. The loans were taken by his company, Reliance Communications, and according to the banks he was a personal guarantor to the loans. Ambani had denied providing authority for any guarantee.
In February, the UK court directed him to pay $100 million in six weeks as part of an interim order. At the time, the court had ruled that it did not accept Ambani’s defence that his net worth was nearly zero or that his family would not help him out if things got really tight for paying up the $100 million.
RCom has now gone into insolvency under a debt of Rs 46,000 crore. “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,” Ambani’s spokesperson said.
Once RCom’s resolution happens, the amount ordered to be paid will reduce, he said.
“The amount claimed under the alleged guarantee will reduce by up to 50% as per the resolution plan for resolution of RCom’s debt which has been approved by 100% of RCom’s lenders and has already been filed in the National Company Law Tribunal on 6 March 2020,” his statement added. UV Asset Resolution and Reliance Jio Infocomm are set to be declared the preferred bidders for RCom’s assets.