Mukesh Ambani Now World’s 4th-Richest & Anil Ambani from 6th richest in world to ‘zero net worth’

The chairman, Mukesh Ambani of Reliance Industries Limited, surged past Europe’s wealthiest man, making him the world’s fourth-richest person.

Reliance Industries Ltd.’s chairman Mukesh Ambani is now worth $80.6 billion, after amassing $22 billion this year, according to the Bloomberg Billionaires Index. That gives him a bigger wealth pile than France’s Bernard Arnault, whose LVMH Moet Hennessy Louis Vuitton SE has suffered from customers curbing high-end fashion purchases faster than the company can cut costs.

Mukesh Ambani is now richer than Larry Page, Sergey Brin and Elon Musk. Mukesh Ambani’s energy empire is slowly shifting to e-commerce, with tech giants seeking to take a piece of India’s fast-growing digital business. The world’s second most-populous nation has seen a spike of foreign interest in its economy, especially from Silicon Valley, and Google said it will spend $10 billion in the coming years to help accelerate the adoption of digital technologies in the country.

Once among world’s 4th richest, Anil Ambani is now struggling to pay dues of his debt-laden companies. Earlier this year, his legal team argued that his net worth is zero and Ambani family won’t come to his aid.

The court was hearing claims by Chinese banks –Industrial and Commercial Bank of China Ltd Mumbai Branch, China Development Bank and Exim Bank of China –that the younger Ambani owes them $680 billion in dues after an alleged breach of personal guarantee on a debt refinancing loan of around $925 billion. The UK court did not buy the argument of Ambani’s legal team, headed by Harish Salve, that the billionaire’s worth, taking into account his liabilities, has turned to zero in a matter of years.

The plaintiffs’ legal team brought into question Anil Ambani’s fleet of cars reportedly worth $3.2 million, private jet and helicopter that he gifted to his wife Tina Ambani, and even his two-floor house in Mumbai’s Sea Wind building at Cuffe Parade. Ambani argued that these assets were owned by corporate entities and are therefore are not part of his personal possessions.

“Whereas Mr. Anil Ambani’s investments were worth more than $7 billion in 2012, they are now worth $89 million, and his net worth is zero once his liabilities are taken into account… Quite simply, he was a wealthy businessman, now he is not,” said his barrister Robert Howe. His legal team argued that their client’s financial standing took a big blow in 2012 owing to a downturn in India’s telecom sector where his company and Anil Dhirubhai Ambani Group (ADAG) crown jewel Reliance Communications.

Anil Ambani claimed he had a personal deficit of $305 million and that his net worth collapsed from $7 billion in March 2012 to zero in December 2019.

A bitter feud broke between Anil Ambani and his elder sibling Mukesh Ambani to take control of their father’s business empire spanning over various industrial sectors and comprising many companies when the latter died in 2002. The brightest and best assets including the new-age telecom business as well as the financial service and energy and infra arms went to Anil Ambani while Mukesh Ambani got the oil & gas, petrochemical, refining and manufacturing assets.

While the elder Ambani went on to become World’s richest, the younger sibling became a case study in how to lose a billion-dollar empire.

In 2008, Anil Ambani was named the sixth-richest person in the world by Forbes which pegged his wealth at $42 billion. In a mere 12 years, according to Ambani’s own admission, it was reduced to net worth to zero.

So, what went wrong for Anil Ambani?

According to analysts, the younger Ambani wanted ADAG to be the biggest player in telecom, power and infrastructure. This fast-paced, debt-fuelled ambition to juggle too many balls at once is what landed him in trouble. Lawsuits failed deals, and mismanagement of companies are other reasons which accelerated the pace of ADAG’s crash.

In 2018, AGAG group companies’ debt stood at Rs 1.72 lakh crore and in 2019, Reliance Communications had a debt of Rs 46,000 crore and was headed for bankruptcy proceedings. Its revenue crashed to Rs 1,734 crore in FY20 from Rs 27,710 crore in FY10. Other group companies also went down a similar trajectory.

How Mukesh Ambani become world’s 4th richest Person now.

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Mukesh Ambani mentioned “I have fulfilled my promise to the shareholders by making Reliance net debt-free much before our original schedule of 31st March 2021”

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