New twist to Anil Ambani's bankruptcy case

The Delhi high court on Monday sought the Centre and SBI's reply to former RCom chairman Anil Ambani's plea to include the Chinese banks, which have got a decree of $717 million against him from a court in United Kingdom, in the proceedings related to recovery of Rs 1200 crore loan granted to two of his companies.

The high court also said that the moratorium on recoveries from sale of Ambani's assets, as provided under section 96 of the Insolvency and Bankruptcy Code (IBC), would remain in operation for now.

This direction came on the application moved by the State Bank of India (SBI) seeking a declaration that the moratorium shall continue to be in effect.

A bench of Justices Vipin Sanghi and Rajnish Bhatnagar also issued notice to the Insolvency and Bankruptcy Board of India (IBBI) on the application by Ambani who has sought impleadment of the Chinese banks so that he does not fall in contempt of court if he complies with the UK court's order passed in May this year.

Ambani has been restrained by the Delhi high court from "transferring, alienating, encumbering or disposing of his assets or legal rights and interests therein" during pendency of his plea opposing the insolvency resolution process (IRP) proceedings against him.

Ambani had given personal guarantees for the Rs 565 crore and Rs 635 crore SBI loans to RCom and Reliance Infratel Ltd (RITL), respectively, in August 2016.

Commenting on developments in the high court, a spokesperson for Ambani said the proceedings in the UK court were in relation to an alleged personal guarantee for a corporate loan availed by RCom and not a personal loan to him.

"Mr. Ambani will continue to take all steps as he may be legally advised to defend himself to the best of his ability in any further proceedings that may be brought in this matter," the statement said.

During the hearing, SBI contended that in the absence of such a direction, companies from world over, like the Chinese banks, might obtain decrees against Ambani and come here to execute the same which would adversely affect the interests of the PSU banks which lent money to his companies.

"Everyone would be dipping into the same pie," the counsel for SBI told the high court.

According to the IBC, moratorium comes into effect when an application is made by either a debtor or a creditor to initiate insolvency proceedings.

The UK court, in May, had directed Ambani to pay $717 million to Industrial and Commercial Bank of China Ltd Mumbai Branch, China Development Bank and Exim Bank of China in relation to an alleged personal guarantee for a corporate loan availed by Reliance Communications Limited (RCom) in 2012 for global refinancing.

According to the UK court order, the nearly $717 million to be paid by Ambani comprises of the principal amount outstanding under the Facility Agreement of $549,804,650.16; interest outstanding as of May 22 of $51,923,451.49; and default interest due of $115,189,579.86.

The Chinese banks had moved the UK court over an alleged breach of a personal guarantee on a debt refinancing loan of around $925 million in February 2012.

Photograph: Prashant Waydande/Reuters