Former Indian billionaire Anil Ambani narrowly escapes being thrown in jail after failing to pay one of his many debts to creditors. Anil's elder brother Mukesh Ambani, who is currently Asia's richest man, stepped in and reportedly paid US$80 million to Ericsson AB to save his younger sibling. The younger Mukesh's various businesses, which range from telecom to power, reportedly owes hundreds of millions of dollars to creditors.
In a public statement, Anil Ambani thanked his brother and his sister-in-law for stepping in to save him from being thrown in jail. With the help of his brother, Anil's company, Reliance Communications Ltd, was able to make the required US$80 million payment just days prior to the deadline set by India's top court.
Both brothers have been at odds for more than a decade following their feud over the control of the empire their father had left them. In 2005, three years after the death of their father Dhirubhai Ambani, both brothers decided to split the empire. The older brother took control of their father's oil and petrochemicals business, which flourished and has resulted in Mukesh becoming the richest man in Asia. According to Bloomberg's Billionaires Index, Mukesh now has a net worth over US$54.3 billion.
Meanwhile, Anil took over their father's newer businesses, which includes telecommunications, power, and infrastructure. The businesses had unfortunately failed to grow and have since been strained under massive debt, with Anil constantly fending off creditors in various lawsuits against him and his companies. Anil had already lost most of his assets and now has a net worth of only US$300 million. That is a stark contrast to his US$31 billion net worth in 2008. According to industry insiders, Mukesh's US$80 million bailout money to his younger brother was an outright grant, which meant that he didn't ask for anything in return.
Following the news of Anil's bailout, stock prices for his company RCom fell by as much as 9.1 percent. The stock has so far fallen more than 60 percent in 2018. The company's creditors, including Ericsson, have been demanding for the company to pay them their past dues. Ericsson had filed numerous cases to force RCom to settle their balance. Anil's company had recently reached a settlement with Ericsson, promising to immediately pay half of what they owe. The settlement had even included Anil's personal guarantee. After failing to keep that promise, Ericsson requested that Anil is held in contempt. Indian courts finally set a payment deadline and possible imprisonment if Anil did not comply.
