A banker said Ambani has objected to the SBI invoking personal guarantees under the Corporate Debtors Regulations, 2019
Indian lenders are keenly watching the outcome of a petition filed by State Bank of India (SBI) in the Supreme Court, which invoked the personal guarantees of Anil Ambani. The SC will hear the petition from Thursday. A banker said Ambani has objected to the SBI invoking personal guarantees under the Corporate Debtors Regulations, 2019. Till November, the IBC only covered Indian companies and not promoters. The new rules are applicable against the personal guarantors given to loans above Rs 1,000 crore or more by promoters.
“As Ambani’s will be the first case where personal guarantees have been invoked and is now in SC, it will decide the fate of 40 other top defaulters who were sent to NCLT since IBC law came into effect in 2017,” said a banker. In its petition to the SC, SBI said several promoters have moved the Delhi High Court after their personal guarantees have been invoked. The fate of dues worth Rs 45,000 crore, including to the Chinese banks, will be decided by the NCLT where the matter is still pending, and the personal guarantee matter will be heard by the top court.
On September 7, the SBI also invoked the personal guarantees of Sanjay Singal, promoter of Bhushan Power & Steel, as the company defaulted to loans worth Rs 48,000 crore. The debt resolution of the company is almost ready in the NCLT, with JSW Steel declared the highest bidder with a Rs 19,700-crore offer. The matter is currently pending in the SC after JSW Steel sought its intervention on not holding the firm liable for any criminal acts of the previous promoter. The SC will come out with its verdict on this issue this month.
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