Supreme Court hands banks their most powerful weapon against promoters yet
Promoters of defaulting companies have had it easy so far, evading personal responsibility. That changes now, and should send chills down the spines of high-flying businessmen.
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Editor's note: Trouble has an uncanny ability of finding its way to Anil Ambani. Two years after Mukesh Ambani, India’s richest businessman, saved his younger brother from going to prison for failing to repay Rs 580 crore that he owed Swedish telecoms equipment manufacturer Ericsson, it seems the junior Ambani may require his sibling’s help once again. Considering that decks have been cleared for the State Bank of India to initiate personal insolvency and bankruptcy proceedings against the younger brother, help can’t come soon enough. Anil Ambani, who told a London court in September last year that he had to sell jewellery for Rs 9.9 crore to pay his legal fees and also that he drove just the one car, does not even have enough personal assets to repay lenders Rs 1,400 crore. The man really needs a lifeline lest he is declared bankrupt. This is after the Supreme Court on Friday upheld the constitutional validity of personal insolvency and bankruptcy on failing to honour personal guarantees furnished to avail of corporate debt. It is a significant development with the potential to …
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