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\u201cThe NCLT order directing appointment of the resolution professional does not constitute an admission of SBI\u2019s insolvency application,\u201d Ambani\u2019s spokesperson said in an emailed response. The court also rejected \u201cSBI\u2019s request for a restriction on Ambani from dealing or appropriating his assets,\u201d the spokesperson said. State Bank of India filed the latest petition on concerns that the Chinese banks will attempt to seize Ambani\u2019s assets after the UK courts ruling.
Set precedent<\/span>
The ruling is the most high-profile insolvency case against a founder who pledged to pay loans on behalf of their companies, which have since been dragged into bankruptcy, and can set precedent for future law suits. Still, the legal case puts a moratorium on attempts to recover dues from Ambani and may hurt a group of Chinese banks\u2019 ability to enforce a separate London court\u2019s order asking Ambani to pay $717 million.
Ambani is taking advice on challenging the verdict in an appellate court, his spokesperson said. \u201cThe order of the NCLT will have no bearing on the operations of Reliance Infrastructure Ltd, Reliance Power Ltd and Reliance Capital Ltd,\u201d Ambani\u2019s spokesperson added, listing out the tycoon\u2019s other companies.
As per the rules, if the Mumbai court admits Ambani into the bankruptcy process, a list of all claims against him will be compiled and a repayment plan will be worked out. Lenders can jointly agree on a plan that may include payouts from his businesses or monetizing his assets.
Handing a victory<\/span>
Ambani had also offered a personal guarantee on the banks\u2019 loans to Reliance Communications in 2012, Judge Nigel Teare said in a ruling on May 22 in London handing a victory to three state-controlled Chinese banks including Industrial & Commercial Bank of China Ltd. <\/p>\n
\u201cSuch action would have an adverse effect on the recovery rights,\u201d SBI said, according to the verdict on Thursday.
The Indian company court\u2019s ruling can be challenged in an appellate court and then the Supreme Court. <\/div>\n