India's Richest Family Defaults; Three Chinese Banks Have Chased Debt for Eight Years Without Success (AI Translation)
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文｜财新 岳跃
By Caixin, Yue Yue
【金融我闻/岳跃】2024年7月12日，印度孟买一场极尽奢华、星光熠熠的婚礼吸引了全球目光。
[Finance Weekly/Yue Yue] On July 12, 2024, a lavish and star-studded wedding in Mumbai, India, captured global attention.
出席婚礼的近2000名来自世界各地的宾客包括比尔·盖茨夫妇、马克·扎克伯格夫妇、英国前首相托尼·布莱尔夫妇、伊万卡·特朗普……美国著名歌手蕾哈娜、贾斯汀·比伯等登台献唱。婚礼请柬据称是用镀金礼盒定制，每份造价高达6770英镑（约合人民币6.2万元）。整个婚礼花费了5000亿印度卢比（约合人民币43.5亿元）。
Nearly 2,000 guests from around the world attended the wedding, including Bill and Melinda Gates, Mark Zuckerberg and Priscilla Chan, former British Prime Minister Tony Blair and Cherie Blair, and Ivanka Trump. Renowned American singers Rihanna and Justin Bieber performed at the event. The wedding invitations were reportedly customized in gold-plated gift boxes, each costing as much as 6,770 pounds (approximately 62,000 yuan). The entire wedding expenditure was 500 billion Indian rupees (approximately 4.35 billion yuan).
这是现年67岁的亚洲首富穆克什·安巴尼（Mukesh Ambani）儿子的婚礼。2024年，穆克什·安巴尼的净资产达1195亿美元，成为世界第九大富豪。比他小两岁的弟弟安尼尔·安巴尼（Anil Ambani），也曾以400亿美元身家跻身《福布斯》全球第六大富豪。
This is the wedding of the son of Mukesh Ambani, Asia’s richest man at the age of 67. In 2024, Mukesh Ambani’s net worth reached $119.5 billion, making him the world’s ninth-richest person. His younger brother by two years, Anil Ambani, also once ranked as the sixth richest person globally on Forbes' list, with a net worth of $40 billion.
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- A grand wedding for Mukesh Ambani's son in Mumbai involved 2,000 guests and cost around 500 billion Indian rupees.
- Mukesh Ambani's wealth contrasts with his brother Anil Ambani's financial struggles and $717 million debt owed to Chinese banks.
- A recent Indian Supreme Court ruling recognizes Chinese banks as financial creditors in Anil Ambani's Reliance Communications bankruptcy case.
[para. 1] A high-profile wedding in Mumbai on July 12, 2024, garnered significant global attention due to its lavishness and celebrity guests such as Bill and Melinda Gates, Mark Zuckerberg and Priscilla Chan, Tony Blair and Cherie Blair, and Ivanka Trump. Performances by Rihanna and Justin Bieber added to the event's glamour. The wedding was estimated to cost 500 billion Indian rupees, with each invitation featuring a gold-plated box. This event was for the son of Mukesh Ambani, Asia's richest man with a net worth of $119.5 billion in 2024, ranking him as the world’s ninth-richest individual. His brother Anil Ambani also had a significant financial past, once being Forbes' sixth richest person globally with $40 billion.
[para. 2] The Ambani family manages India's wealthiest private enterprise, Reliance Group, established by their father Dhirubhai Ambani. After Dhirubhai's death in 2002, his sons took over leadership. Despite their successes, the company faced financial challenges when Chinese banks pursued $717 million in unpaid loans from Reliance Communications, previously guaranteed by Anil Ambani. The company's financial woes prevented these banks from reclaiming their dues as financial creditors in the ongoing bankruptcy procedures.
[para. 3] Dhirubhai Ambani, who hailed from a humble background, founded the family business. He initially traded spices and later expanded into the textile and petrochemical industries, leveraging political connections to grow Reliance Group. His sons took over in the mid-1980s, resulting in Reliance Industries becoming India’s highest-valued company. Reliance Communications, once India's second-largest telecommunications firm led by Anil Ambani, started struggling as the telecom industry landscape shifted.
[para. 4] Reliance Group’s financial alliances, particularly with Chinese banks, have been significant. Reliance Communications had secured loans, including a $1.93 billion loan from the China Development Bank to manage debts. However, the company defaulted in 2017 and suspended operations, entering bankruptcy in 2018 as it struggled to compete against its sibling company, Reliance Jio, led by Mukesh Ambani.
[para. 5] The Chinese banks, in 2019, sought repayment claims through the UK's judiciary system, resulting in Anil Ambani being mandated to repay $717 million and disclose assets. Despite the claims, Ambani's lawyer argued against the validity of the personal guarantees. The debt dispute highlighted family conflicts and financial complexities within the Ambani enterprises.
[para. 6] The pursuit of the debt by Chinese banks faced legal setbacks when their status as financial creditors was challenged in India. However, in 2020, an initial verdict supported their claims, enabling them to engage in debt restructuring discussions. Contrarily, a later ruling excluded them from creditor status, a decision overturned by the Supreme Court of India in late 2024. The Supreme Court’s ruling recognized the banks as financial creditors based on the insolvency code, underscoring global practices for creditor inclusion during bankruptcy resolutions.
[para. 7] The recent court ruling emphasizes the flexible interpretation of financial obligations and creditor rights, highlighting the international ties involved in Reliance Communication’s financial unraveling. This decision provides a more comprehensive approach to creditor classification in India, emphasizing the importance of contingent liabilities in corporate bankruptcies, ensuring the equitable treatment of international financial institutions.
- Reliance
- Reliance Group, operated by the Ambani family, is India's wealthiest, originating from father Dhirubhai Ambani's ventures in textiles and commodities. Reliance industries, led by Mukesh Ambani, is India's highest-valued company, while his brother Anil's Reliance Communications went bankrupt, leading to extensive legal battles over debts, including with Chinese banks. The group's businesses span textiles, petrochemicals, telecom, and retail. Mukesh launched Reliance Jio, significantly impacting India's telecom industry with rapid growth.
- Reliance Communications
- Reliance Communications, once India's second-largest mobile telecom operator controlled by Anil Ambani, entered bankruptcy proceedings in 2018 due to financial struggles. It faced challenges following the rise of Reliance Jio, led by Anil's brother Mukesh Ambani. Reliance Communications was involved in legal disputes over debts totaling 7.17 billion USD, with claims from Chinese banks. These banks were eventually recognized as "financial creditors" by India's Supreme Court in a 2024 ruling.
- Reliance Industries
- Reliance Industries, controlled by Mukesh Ambani, is India's most valued company. Founded by Dhirubhai Ambani, its operations span textiles, natural gas, petrochemicals, telecommunications, and retail, with over 230 subsidiaries. Mukesh's leadership propelled it to significant growth, particularly with the launch of Reliance Jio, India's first full 4G network operator. The company played a central role in a family rivalry affecting India's telecom market dynamics.
- Shanghai Electric
- In 2010, Shanghai Electric supplied Reliance Power, a subsidiary of Reliance Group, with electricity equipment valued at over $10 billion. This significant deal was supported by around $10 billion in financing from multiple Chinese banks and was considered one of the largest commercial contracts between China and India at the time.
- Industrial and Commercial Bank of China
- The Industrial and Commercial Bank of China (ICBC) is one of the Chinese banks involved in a long-standing debt recovery case against Reliance Communications, backed by Anil Ambani, for a $7.17 billion loan. Despite challenges in being recognized as a "financial creditor" due to a lack of direct lending, a December 2024 ruling by India's Supreme Court granted ICBC and other banks this status, allowing them to participate in debt restructuring votes.
- China Development Bank
- China Development Bank was one of the three Chinese banks pursuing a debt claim against Reliance Communications for a $7.17 billion loan. They faced legal challenges in India but were eventually recognized as "financial creditors" by the Indian Supreme Court, allowing them to participate in the debt restructuring process. This recognition followed years of legal proceedings and emphasizes the rights of creditors in international bankruptcy situations.
- Export-Import Bank of China
- The Export-Import Bank of China is one of the three Chinese banks involved in pursuing an unpaid debt of $7.17 million from Reliance Communications, a company under the Ambani family. The bank, alongside China Development Bank and Industrial and Commercial Bank of China, was initially not recognized as a "financial creditor" in the bankruptcy proceedings but was later granted this status by the Indian Supreme Court.
- Reliance Power
- Reliance Power, a subsidiary of the Reliance Group, purchased power equipment worth billions of dollars from Shanghai Electric in 2010. This transaction was supported by approximately $10 billion in financing from several Chinese banks, marking one of the largest commercial contracts between China and India at the time.
- Reliance Jio
- Reliance Jio, launched by Mukesh Ambani in 2016, is India's first all-4G network operator. It used an attractive strategy by offering free SIM cards and unlimited data for the initial months, rapidly gaining users. Within 170 days, it surpassed 100 million users, leading to a price war that changed India's telecom market. Eventually, this competition significantly impacted Reliance Communications, headed by Anil Ambani, contributing to its financial struggles.
- Doha Bank
- Doha Bank, a direct lender to Reliance Communications, was initially recognized as a "financial creditor" in the bankruptcy proceedings of the company. The bank opposed the qualification of Chinese banks as financial creditors, arguing that their claims were based purely on guarantee agreements rather than direct loans, and sought to have their creditor status revoked. This move was seen as an attempt by Doha Bank to fully recover its loans.
- After 2002：
- Dhirubhai Ambani passed away, and his two sons inherited the Reliance conglomerate.
- October 2010：
- Chinese banks provided approximately $1 billion in financing when Reliance Power purchased power equipment from Shanghai Electric.
- Two months later：
- Reliance Communications secured a $1.93 billion loan from China Development Bank.
- November 2011：
- Anil Ambani traveled to Beijing to discuss loans with Jiang Jianqing, Chairman of ICBC.
- 2012：
- Reliance Communications secured a $925 million loan from Chinese banks.
- After February 2017：
- Reliance Communications began defaulting on loans.
- November 2017：
- China Development Bank filed a bankruptcy application against Reliance Communications in India's NCLT.
- Early November 2019：
- Chinese banks filed a lawsuit against Anil Ambani in London.
- May 22, 2020：
- UK court issued a ruling requiring Anil Ambani to repay $717 million to Chinese banks.
- September 25, 2020：
- Anil Ambani attended a hearing at the UK High Court via video link.
- December 3, 2020：
- NCLT ruled Chinese banks as 'financial creditors'.
- September 9, 2022：
- NCLAT overturned the NCLT's ruling, stating Chinese banks are not financial creditors.
- By December 2024：
- Indian Supreme Court upheld the status of Chinese banks as 'financial creditors'.
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