Embattled tycoon Anil Ambani, who heads the Reliance Group and is the younger brother of India’s richest man Mukesh Ambani, has landed in a yet another legal tangle over defaulting on a loan.

Three Chinese banks – Industrial & Commercial Bank of China Ltd, China Development Bank and the Export-Import Bank of China – sued him in a London court for defaulting on a loan of US$680 million to mobile phone services arm Reliance Communications, according to media reports.

One of the lawyers of the Chinese banks claimed the loan was reportedly provided on the condition that Ambani provided a personal guarantee. While some payments were made by the company, it defaulted in February 2017. Anil Ambani had agreed to give a non-binding personal comfort letter, but never gave a guarantee tied to his personal assets.

The lawyer claimed the loan was set up seven years ago and Hasit Shukla, Reliance’s commercial and treasury head, had signed a personal guarantee on Ambani’s behalf by power of attorney.

However, Ambani’s lawyer claims he did not give Shukla permission or the authority to sign for him, making the guarantee non-binding. The banks state that this is a straightforward debt claim that is being made to recover outstanding loans made to Reliance Communications in good faith, and secured by a personal guarantee given by Ambani.

The banks have urged the judge for either an early ruling or a conditional order that would ensure Ambani pay the unpaid sum and interest to the court under the facility agreement. Reliance Communications filed for bankruptcy in February this year.

According to a filing in the Bombay Stock Exchange in June this year, it owes 53 lenders about 573.82 billion rupees ($8.03 billion).

The company stated it borrowed 98.63 billion rupees ($1.38 billion) from China Development Bank, while Exim Bank of China had extended a loan of 33.56 billion rupees ($470 million) and Commercial Bank of China 15.54 billion rupees, or $217 million.

Among the Indian lenders, State Bank of India (SBI) is the biggest creditor with a loan of 49.05 billion rupees ($686 million), followed by Life Insurance Corporation of India with 47.58 billion rupees ($666 million) and Bank of Baroda with 27.07 billion rupees ($379 million).

In March this year, Ambani was caught up in a similar case when India’s Supreme Court threatened him with prison after Reliance Communications failed to pay 5.5 billion rupees ($77 million) to Swedish telecom equipment maker Ericsson. The judges gave him one month to find the funds, and his brother and industrialist Mukesh Ambani made the payment.

Ericsson had signed a seven-year deal with Reliance Communications in 2014 to operate and manage its nationwide telecom network. After non-payment of dues since 2016, Ericsson had approached the National Company Law Tribunal in September 2017.

Anil Ambani’s other group companies are also facing financial stress. Last week insurance sector regulator the Insurance Regulatory and Development Authority barred Anil Ambani-led Reliance Health Insurance Ltd from selling new policies due to its weak financial health.

The regulator has also asked the life insurer to transfer the liabilities of policyholders along with financial assets to Reliance General Insurance Co Ltd, which in turn will settle claims of the existing policyholders.

Last month its mutual fund arm Reliance Mutual Fund was renamed Nippon India Mutual Fund, after the Japanese company purchased a 75% stake.

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