Embattled ex-billionaire and brother of the wealthiest man in Asia Mukesh Ambani, Anil Ambani, has had no shortage of financial troubles as of late. Now, Bloomberg reports that Ambani is being taken to court by three Chinese banks over some $680 million in unpaid loans.
Those three banks are the Industrial & Commercial Bank of China Ltd., the China Development Bank, and the Export-Import Bank of China, which together loaned Ambani's company Reliance Communications Ltd. $925.2 million in 2012. That loan was given on condition of a personal guarantee from Ambani, but in February of 2017 the company defaulted on the loan with a balance of $680 million.
Ambani says that the "personal comfort letter" he offered to secure the loan was non-binding and did not tie his guarantee to his own financial assets, which he says would have been an "extraordinary potential personal liability," even as he's seen those assets sink beneath the billionaire margin in recent years. In a court filing, Ambani's lawyer says that in loaning him the money the banks "failed and continues to fail, to distinguish between Mr. Ambani on the one hand, and the company to whom the loans were being extended…on the other."
This isn't the first time this year that Ambani has gotten into trouble over unpaid loans. India's Supreme Court said he could be facing jail time over 5.5 billion rupees he owed a few months ago. He was given one month to find the money, and his brother Mukesh ended up paying off the loan himself – and it's possible that this could happen again this time.
Right now, the Industrial & Commercial Bank of China (which is representing itself and the other two lenders in court) is asking the presiding judge to order Ambani to pay up. In their press statement, they summed up their actions like this:
"This is a straightforward debt claim to recover outstanding loans made to RCOM in good faith, and secured by a personal guarantee given by Mr. Anil Ambani."
In a press statement (through a spokesperson) of his own, Ambani has his own view of the situation:
"Mr. Ambani's position is that the claim made by ICBC in relation to his alleged personal guarantee for loans to RCOM is without merit."
Ambani appears to be in quite a spot, since the amount his company owes on the loan is more than twice his current net worth of $300 million.