Anil Ambani joined Reliance Industries in 1983 as an executive dealing with business investors in the press. By 2002, Reliance had grown into a $15 billion conglomerate. But sadly Dhirubhai Ambani passed away the same year, leading to the infamous Ambani brothers' feud. This feud led to the split of Reliance into two, and Anil Ambani got the reigns of the Reliance ADA Group. 

In 2008, Anil Ambani was the sixth richest person in the world with a net worth of $42 billion. His net worth had grown up by $23.8 billion after he made Indian Stock Market history by listing Reliance Power, which turned out to be the biggest offering in India at that time. So, how did Anil Ambani go from being the sixth richest man in the world to filing bankruptcy in 2020? Let's understand it through the series of events. 

1. The failed deal with MTN

Anil Ambani invested around $2 billion in advancing Reliance Communications, which was the leading mobile provider in India in 2008. To pay off the increasing debts, Reliance Communication was in conversation with the South African mobile company, MTN. 

mtn
Source: Wikimedia

This deal was intended to combine the two into one mega mobile merger. But the deal fell through due to a legality issue, and with that went Anil Ambani's hopes for a debt clearing way out. 

2. The 2G scandal of 2011

In April 2011, Anil Ambani's Managing Director and two Vice Presidents were arrested on suspicion of conspiring to acquire mispriced mobile network licenses for companies Reliance Communications has invested in to deceptively bolster share prices. 

cbi 2g spectrum
Source: ET

The CBI questioned Anil Ambani on his alleged involvement in the 2G spectrum case, which saw his net worth collapse 4-folds to $8.8 billion. 

3. Over $1.2 billion loans from 3 Chinese Banks in 2012

In 2012, amidst scandals, Anil Ambani acquired more debt to pay off the existing debts. Reliance Communications took a loan of over $1.2 billion from three Chinese Banks on Anil Ambani's personal guarantee. 

chinese bank
Source: Caixin Global

4. The entry of Jio in 2016

By 2016, many of Anil Ambani's companies ran into debt and operational troubles. On the one hand, Reliance Power had to sell its assets. On the other, Reliance Communications lost 98% valuation over a period of 3 years. RCom was unable to compete against the top reigning telecom companies and lost consumers. This brought down Anil Ambani's net worth to $2.5 billion.

jio
Source: Fortune India

5. Lawsuit from Ericsson in 2016

Anil Ambani's Reliance Communication owed the Swedish network company, Ericsson, $80 million, which he failed to repay. As a result, Ericsson filed a lawsuit against Anil Ambani in 2016.

In 2019, the Supreme Court of India ordered Anil Ambani to repay the debt along with interest or go to jail. In an unlikely intervention, Anil Ambani's elder brother Mukesh Ambani paid the money owed to Ericsson and saved Anil Ambani from going to jail.

anil mukesh
Source: India Today

6. The return of the Chinese Banks

Reliance Communications filed bankruptcy in 2019. The $1.2 billion loan that it took from the three Chinese Banks - Industrial and Commercial Bank of China, Export-Import Bank of China and China Development Bank - was only partially paid till then.

anil ambani
Source: Aaj Tak

Anil Ambani still owed over $700 million including interest. In February 2020, Anil Ambani declared that his net worth has fallen to zero after considering his liabilities. He pleaded poverty and claimed that he doesn't hold any meaningful assets that could be liquidated to pay off the debts he owed to the Chinese Banks.

The value of my investments has collapsed. My net worth is zero after taking into account my liabilities. In summary, I do not hold any meaningful assets which can be liquidated for the purposes of these proceedings.

                    - Anil Ambani

We have all heard the stories of rags to riches but rarely do we hear a story of riches to rags. This is one of those rare ones. Who would have thought that a man who had a net worth of $42 billion in 2008 would claim poverty in 2020? 

Also Read | 9 Lesser-Known Facts About Mukesh Ambani's Reliance Industries Limited