Anil Ambani’s tryst with controversies seems to be never ending. In the past decade-and-a-half, he has slipped into bankruptcy from being the world’s sixth richest person at $42 billion in 2008, sold family jewel to pay lawyers and seen his marquee firms being auctioned at the National Company Law Tribunal. In between, he was threatened with imprisonment by the Supreme Court. The latest knock to his once-formidable reputation came when he was barred from stock markets for five years by the Securities and Exchange Board of India (Sebi).
While he is yet to decide whether to challenge the Sebi order, the younger son of the Dhirubhai Ambani has not had it his way for many years now. In 2002, after the passing away of his father, the acrimonious split of the $15-billion Reliance empire saw Anil get control over sunrise sectors such as Reliance Communications (RCom), Reliance Capital (RCap) and Reliance infrastructure, while Mukesh took over the flagship oil and petrochemical venture Reliance Industries.
But this euphoria was short-lived. Anil’s aggressive expansion strategies and investments quickly made headlines, particularly with the unprecedented success of the Reliance Power listing in 2008 — the biggest initial public offering (IPO) in India at the time saw brokers and investors willing to bet their lives’ saving on it. No one asked the basic question: How did a company with profits of Rs 16 lakh command such a premium? The IPO was fully subscribed in under 60 seconds, was subscribed 70 times and mopped up Rs 11, 500 crore.
However, within hours of listing, the share price fell from the high of Rs 540 to close at Rs 372, wiping out billions of investor wealth.
But that’s not all. The collapse of a $2-billion deal with South African telecom giant MTN in 2008, which was intended to alleviate the debt burden on Anil’s flagship RCom, marked the beginning of a downward spiral for the telco, which was forced into insolvency by 2019. Once a leading telecom player, it was soon drowning in debt and unable to compete with the likes of Jio and Airtel.
In 2019, the SC threatened to jail Anil after RCom failed to pay Rs 550 crore owed to Ericsson AB. While his brother Mukesh aid off the debt and saved him from imprisonment at the last minute, the financial crisis deepened when three Chinese banks sued him in a London court over a $680-million loan default.
As if these setbacks weren’t enough, 2020 saw Anil declare bankruptcy in a UK court, claiming that his net worth had shrunk to virtually nothing. In 2021, RCap, another key firm in Anil’s group, filed for bankruptcy after defaulting on bonds worth Rs 24,000 crore.
The year 2024 started on a bad note for Anil as the Supreme Court overturned a Rs 8,000-crore arbitral award tied to Reliance Infrastructure’s metro subsidiary, further straining his financial situation.
The recent Sebi ban followed allegations of fund diversion at Reliance Home Finance, where Anil, as the former chairman, was accused of orchestrating a fraudulent scheme to siphon off funds. Sebi’s 222-page order detailed how loans were approved to companies with minimal assets or revenue, raising serious concerns about governance and transparency.
Currently, his sons — Jai Anmol and Anshul — are working towards reviving the group’s fortunes. According to reports, there are plans to make Reliance Power debt free by FY25.
For the man who launched 30-year Yankee bonds in 1997, when few were even aware of these instruments, it would be interesting to see if Anil still has a last throw of dice in his arsenal.
From: financialexpress
Financial News
