New Delhi: An Indian court halted personal bankruptcy case hearings against Anil Ambani, in order to hear his broader challenge against certain parts of the country’s insolvency law.
The Delhi High Court on Thursday restrained the former billionaire from selling or transferring his assets. It allowed insolvency proceedings against Ambani’s telecom companies, including Reliance Communications Ltd., to continue.
The outcome could set a precedent for other cases, where Indian businessmen pledged to repay loans on behalf of their companies that later went bankrupt. The court’s order on Ambani’s assets may impact a group of Chinese banks that are trying to recover $717 million following a dispute over defaulted loans.
A spokesman for Ambani declined to comment.
The Indian court asked State Bank of India to submit its view on Ambani’s petition. Although the personal bankruptcy case isn’t yet admitted, a tribunal last week appointed a resolution professional to verify the lender’s claim that Ambani offered about $160 million of personal guarantees while seeking loans in 2016 for his now insolvent Reliance Communications and Reliance Infratel Ltd.
Regarding Ambani’s broader challenges to Indian bankruptcy law — specifically rules pertaining to personal guarantees and individual bankruptcy — the court’s two-judge panel headed by Justice Vipin Sanghi has sought views from the federal Ministry of Corporate Affairs and the bankruptcy regulator Insolvency and Bankruptcy Board of India.
Delhi High Court will next hear Ambani’s petition on October 6. – Bloomberg
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