NCLT accepts SBI's plea to initiate Anil Ambani's personal bankruptcy
What's the story
The National Company Law Tribunal (NCLT) in Mumbai has accepted a plea from the State Bank of India (SBI) to initiate personal insolvency proceedings against industrialist Anil Ambani. The order allows for the initiation of personal insolvency proceedings and the appointment of a Resolution Professional. This professional would be responsible for taking control of Ambani's personal assets under the Insolvency and Bankruptcy Code.
Legal proceedings
Case stems from SBI's attempt to recover ₹1,200 crore
The case stems from SBI's attempt to recover some ₹1,200 crore linked to personal guarantees allegedly given by Ambani for loans extended to Reliance Communications (RCom) and Reliance Infratel. Following the tribunal's decision, Ambani confirmed his intention to challenge the order before the National Company Law Appellate Tribunal (NCLAT).
Case clarification
NCLT order pertains to 'disputed personal guarantee': Ambani
A spokesperson for Ambani issued a statement explaining that the NCLT order pertains to a "disputed personal guarantee allegedly extended by Mr. Ambani to the State Bank of India in 2016." The statement clarified that this matter dates back nearly a decade and is related to Reliance Communications's facility "for the repayment of its borrowings from Chinese lenders." It also emphasized that Ambani "derived no personal benefit from the said funds."
Legal strategy
Order will be reviewed by Ambani's legal team: Spokesperson
The spokesperson further stated that the NCLT order was passed in relation to events that predate India's personal insolvency framework. They added, "The Order, once available, will be reviewed by Mr. Ambani's legal team and challenged through appropriate legal remedies, as advised." The admission of SBI's petition is a major procedural step in the long-standing dispute over guarantees linked to Reliance Communications and Reliance Infratel's debt obligations.