The Decline of a Billion Dollar Fortune: Indian Tycoon Anil Ambani
While the younger sibling was battling all the trouble, there was a moment of relief when Mukesh came to Anil’s rescue for his debt of Rs.5.5 billion which he owed to Erikson in 2019.
The richest family of India which manages to grab headlines everyday is The Ambani family. Both the brothers, Mukesh and Anil are associated with that of Dhirubhai Ambani. Both of them are counted amongst the richest people of India. Mukesh Ambani is the elder brother while Anil Ambani is the younger one. According to a report published by Forbes 2020, Mukesh Ambani occupies the 5th position in the list of all the richest people in the world. On the contrary, Anil Ambani occupies the 1349th position in the same list. If the assets of both Ambani brothers are combined, very soon they will win the race to become the richest family in this world.
Unfortunately, a bunch of strategic mistakes has pushed a promising business from Anil Ambani’s stable to a wind down mode. As of December 31, 2019, Anil Ambani’s telecom, naval, infrastructure, and power businesses have defaulted on loans worth over Rs 43,800 crore.
He is facing three lawsuits by Chinese banks, which are trying to recover their $680 Million they lend to Reliance Communications in 2012 with the condition that Ambani will personally guarantee the debt. The London court has also given a verdict where he has to give $100 million within 6 weeks to the respective parties. To which he said,” I am a simple man, living a simple life, and do not own any assets which can be liquidated to fulfill the debts.”
Let’s understand what happened to have caused this downfall and even after starting at the same point, one managed to gain riches and the other, rags. In 2008, Anil Ambani, according to Forbes was the 6th richest person in the world with a Net worth of $42 Billion. After 12 years, now Ambani has pleaded poverty in a London court, claiming his worth is no more.
After the demise of Dhirubhai Ambani, his fortune was divided equally between the brothers, the elder one received all the older companies like,” Reliance Industries limited, Reliance Petroleum pvt ltd , Reliance Petro Chemical Corporation Ltd, Reliance Infrastructures Pvt Ltd, ” whereas, the companies, “Reliance Communications, Reliance Capital, Reliance Energy, Reliance Natural Resources Ltd,” were handed over to the younger son.
As mentioned earlier, a series of miscalculated steps like constructing a property worth 4500cr in Polihills, simply to compete with Mukesh’s Antilia, Investing in Big Cinemas, and getting involved in politics lead to his big decline. With the increasing debts, Anil sold his Big Cinemas to Carnival Cinemas for a worth amount of 750cr in the year 2014. Within the next two years he took a big step again and sold his Radio and Media shares for 1872cr. Soon after those events, his net worth came down to $1 Billion.
By this time, 10 years has passed since the division of the business, and the Elder Ambani shocked everyone with him entering into Telecom Industries and the announcement of Reliance-Jio, which was again a big jerk to Anil’s financial ride. While the younger sibling was battling all the trouble, there was a moment of relief when Mukesh came to Anil’s rescue for his debt of Rs.5.5 billion which he owed to Erikson in 2019.
The latest statement that Junior Ambani made was that he has used the jewelry he possessed for all the legal expense and dismissed the claims of owning a fleet of luxury cars as well as the artworks which he said belongs to his wife Tina Ambani. Any other assets that he will have to use would be subject to court for approval. His spokesperson said, ‘Anil is a man of simplicity unlike the perception people might have for him.”
The Chinese banks decided to use all available avenues to protect their rights and recover the debts, leaving Anil Ambani in a turmoil of lawsuit and bankruptcy.
written By:Bushra Masood