Mumbai: The Mumbai bench of the National Company Law Tribunal (NCLT) has appointed a resolution professional with regard to State Bank of India’s (SBI) personal bankruptcy petition against Anil Ambani.
A spokesperson for Ambani said on Friday that the order directing appointment of the resolution professional does not constitute an admission of SBI's insolvency application by the NCLT.
“The resolution professional will examine SBI's insolvency application against Ambani and submit a report to the NCLT. The NCLT has declined SBI's request for a restriction on Ambani from dealing or appropriating his assets, to the prejudice of the interest of SBI," the spokesperson said, adding that Ambani is reviewing the order and is taking advice on filing an appropriate appeal before the National Company Law Appellate Tribunal (NCLAT).
Before the nationwide covid-19 lockdown began in March, SBI had filed a personal bankruptcy case against Ambani, the chairman of the Reliance Group. The application was filed under Section 95 of the Insolvency and Bankruptcy Code (IBC). Under the Code, whenever an application is filed under Section 94 or 95, the tribunal has to direct the Insolvency and Bankruptcy Board of India, within seven days of the application, to nominate a resolution professional.
“The authority accordingly has no other option than to issue the direction," said the NCLT order on 20 August. It appointed Jitender Kothari as the resolution professional.
According to the order, Reliance Communications Ltd (RCom) approached SBI in 2015-16 for credit facilities of ₹565 core to repay certain existing financial indebtedness. Its subsidiary Reliance Infratel Ltd (RITL) also approached SBI for ₹635 crore for the same purpose. The state-owned bank provided these loans in 2016.
Ambani had provided personal guarantees under a personal guarantee deed in September 2016 in favour of SBI. However, both RCom and RITL committed defaults in repayment in and around January 2017 and were classified as bad loans. The bank then invoked the personal guarantee and issued an invocation notice in January 2018 and despite various correspondence, no repayments were made.
“The applicant (SBI) apprehends that it would not be able to recover the claim amount from the corporate insolvency resolution process (CIRP) or from the borrowers RCom and RITL. It accordingly issued a demand notice dated 20 February 2020 to the respondent (Ambani) demanding payment," said the order.
It went on to add that when Ambani did not respond to the notice, SBI approached the tribunal with a Section 95 petition.
Meanwhile, a clutch of Chinese banks has also initiated recovery proceedings against Ambani in the UK. The Commercial Division of the High Court of England and Wales, in an order on 22 May, directed him to pay ₹5447.53 crore within 21 days.
The NCLT order also showed that SBI is concerned that if the Chinese banks tr to enforce any proceedings against Ambani in India, it would affect the state-owned bank’s recovery rights.
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