(Bloomberg) — The brother of Asia’s richest man has pleaded poverty in his dispute with three Chinese banks seeking $680 million in defaulted loans.
“The value of my investments has collapsed,” Anil Ambani said, according to a court filing by the banks in a London lawsuit. “The current value of my shareholdings is down to approximately $82.4m and 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 $925 million to Ambani’s Reliance Communications Ltd (BO:) in 2012 with the condition that he personally guarantee the debt. The comments were disclosed Friday as Ambani sought to avoid depositing funds with the court ahead of a trial.
The embattled Indian tycoon says 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 brother of Mukesh Ambani, who’s worth $56.5 billion and is the wealthiest man in Asia. Anil, 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.
The banks asked the judge to force Ambani to put up the full amount of the debt “or such other sum as the court consider appropriate” while the litigation continues, according to their court filings in the case.
Representatives for Ambani’s Reliance Group said Friday they couldn’t immediately comment. They said the group will issue a statement once the court issues the final order.
Ambani’s lawyer, Robert Howe, said the court shouldn’t order his client to make a payment he can’t make.
According to the banks, Ambani argued that he is unable to make any payments and that an order requiring him to do so would hinder his ability to defend himself in the case.
Bankim Thanki, an attorney representing Industrial & Commercial Bank of China Ltd., China Development Bank and the Export-Import Bank of China, said in a filing that Ambani’s statements are “plainly a yet further opportunistic attempt to evade his financial obligations to the lenders.”
Ambani was caught up in another legal wrangle last year year, when India’s Supreme Court threatened him with prison after Reliance Communications failed to pay to pay 5.5 billion rupees ($77 million) to Ericsson (ST:)AB’s Indian unit. The judges gave him a month to find the funds, and his brother, Mukesh, stepped in just in time to make the payment.
The brothers’ relationship has been fraught since their father’s death left behind a vast empire that was split between them. While Mukesh’s oil and petrochemicals businesses have flourished, Anil’s assets dwindled.
Anil said in a filing that he recognized that 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 enquiries but I am unable to raise any finance from external sources,” he said.
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