Anil Ambani’s net worth is “zero”; allegedly owes $680 million to Chinese banks
Anil Ambani, the man whose net worth was of $42 billion told a UK court in February that his net worth was reduced to zero and there's no one to support him including family when “push comes to shove”, as per a report.
Banks of China including Exim Bank of China, China Development Bank, Industrial and Commercial Bank of China Ltd Mumbai Branch claimed in the UK court that Anil Ambani owes them $680 million. He had taken a refinancing loan of $925 billion from the Chinese banks and now Ambani is alleged to have breached the personal guarantee on the loan.
Ambani's legal team argued in the UK court that his net worth has reduced to zero including all his liabilities but the court did not buy their argument. The team was headed by Harish Salve.
Ambani's assets including his two-floor Cuffe Parade's house in Mumbai's Sea Wind building, his wife Tina Ambani's helicopter, private jet, and his $3.2 million worth fleet of cars were questioned by the plaintiffs' legal team. To which Ambani argued that all these assets are not his possessions as they are owned by corporate entities.
Anil Ambani's barrister, Robert Howe said, “whereas Mr Anil Ambani’s investments were worth more than $7 billion in 2012, they are now worth $89 million, and his net worth is zero once his liabilities are taken into account… Quite simply, he was a wealthy businessman, now he is not.”
Ambani's legal team argued that the downturn of 2012 in India's telecom sector caused a big blow in the financial standing of his client and the crown jewel of Anil Dhirubhai Ambani Group (ADAG), Reliance Communications.
Ambani claimed that his net worth collapsed to zero in December 2019 from $7 billion in March 2012 and his deficit was $305 million.
The father of Mukesh Ambani and Anil Ambani died in 2002, which caused a bitter feud between the siblings to take control of their father's empire. The younger brother, Anil Ambani got energy, infra arms, financial service, and the new-age telecom business. Whereas the elder brother, Mukesh Ambani got manufacturing, refining, petrochemical, and oil & gas assets.
The elder brother expanded its horizons whereas the younger brother diminished a billion-dollar empire.
Forbes had named Anil Ambani as the world's sixth-richest person in 2008 and at that time his net worth was $42 billion. And now after 12 years, Ambani has admitted that his net worth has collapsed to zero.
So, how did this happen? As per the analysts, Anil Ambani wanted his telecom company ADAG to be the biggest player in the world's telecom market. This ambition of Ambani made him juggle a lot of balls at the same time which resulted in the trouble. The mismanagement of the company and failed lawsuits deals are the reasons that collapsed his net worth.
The ADAG group had a standing debt of Rs 1.72 lakh crore in 2018 and Reliance Communications' debt stood at Rs 46,000 crore in 2019 and Ambani was headed for the proceedings of bankruptcy.
Its revenue crashed from Rs 27,710 crore in FY10 to Rs 1,734 crore in FY20. Anil Ambani owned other groups of companies also collapsed at a similar pace.
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