Chinese banks to take legal action against Indian business tycoon, Anil Ambani, for defaulting on $716 million debt

The development comes after the blockaded former Reliance Communications (RCom) Chairman was investigated by a UK court on Friday.

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Three Chinese banks have decided to take legal action against the Indian business tycoon, Anil Ambani, to recover their dues worth $716 million.

In an official statement, the legal team representing the three Chinese banks said, “The banks will use the information from the cross-examination to proceed upon all possible legal avenues to protect their rights and recover the loans owed to them.”

The development comes after the blockaded former Reliance Communications (RCom) Chairman was investigated by a UK court on Friday.

In February 2012, The Reliance Communications took a loan worth $716 million from three Chinese Banks that Anil Ambani provided with a personal guarantee.

In bankruptcy proceedings, the company defaulted on the loan, which the banks have sued it for, demanding that the amount must be recovered with interest.

On the 22nd of May 2020, through a remote hearing, Justice Nigel at the Commercial Division of the High Court in London had ordered that Ambani is required to honor the guarantee he provided. The court further said, “It is declared that the guarantee is binding on the respondent (Ambani). He must pay up to $7.17 million, including legal costs to the three Chinese banks by the 12th of June.”

When Anil Ambani “consistently failed” to pay his substantial debt to the three banks, they obtained a judgment earlier this year from the English High Court for the full amount owed (over $716 million) under a personal guarantee given by Anil Ambani.

The order required him to fully disclose all of his assets worldwide, exceeding $100,000 on the 29th of June.

On the 25th of September, when Anil Ambani appeared via video link in the court, he was cross-examined for four hours, where he insisted that his wife and family are bearing all his expenses.

He also emphasized that contrary to belief, his lifestyle is not “lavish.” He told the court he leads a simple life, drives one car, and owes his family money.

The banks had made it clear then that they would pursue all possible avenues to recover the money from Ambani’s assets outside India.

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