According to the study conducted by the US think tank – Aid Data, from 2008 to 2010 alone, Anil Ambani’s now debt-ridden Reliance companies bagged around Rs.15 Billion US Dollar loans from Chinese banks. The interesting fact about these loans is that the Chinese banks gave such huge loans to Anil Ambani’s Reliance Group’s Telecom and Power ventures for purchasing Chinese equipment.
According to Aid Data’s research paper on China’s Global Footprints, in May 2008, first Reliance Communications got $750 Million to purchase Chinese telecom equipment from Huawei. This loan was given by China Development Bank when Anil Ambani’s Telecom firm bagged the controversial GSM license. In December 2010, the Chinese Development Bank with other Chinese banks’ consortium funded a big loan of 1.93 Billion Dollars to Anil Ambani’s now-defunct Reliance Communications. This was used for short term refinancing and to buy controversial Chinese equipment from Huawei and ZTE, which was always objected to by India’s Intelligence Bureau. Though IB sleuths objected, Anil Ambani always managed to get clearances from Home Ministry and Telecom Ministry.
The Aid Data report says: “The loan would be split into two parts: $1.33B would go to refinancing short term debt, while the remaining $600M USD (Rs.43108 crores) would be used to buy equipment from Huawei and ZTE. The loan was finalized on March 9, 2011.”
In 2012, a memorandum of understanding [MoU] was signed during a day-long 2nd India-China Strategic Economic Dialogue. Reliance Power and Guangdone Mingyang Wind Power Industry Group Co-signed an MOU for 2,500 MW energy projects over 3 years to be financed through a 3 billion USD investment by China Development Bank. The two companies represent some of the largest private sector power companies within their respective countries. Ming Yang’s role is to provide total engineering, procurement, and construction solutions for these projects. Reliance Power will act as a supporting player and provide local market support, said the Report.
“In October 2010, Reliance Power ordered equipment valued at $10 billion from Shanghai Electrical Group, Co. It is reported that Reliance got a 30-40 percent discount on the price from Shanghai Electrical thus the final amount paid will be a lot lower than that. Multiple Chinese banks financed this project together with Standard Chartered Bank. The total finance coming from China is $1.1 billion. The equipment will provide 30K MW of coal-based power capacity and includes 42 power generators of 660MW power. The equipment would be delivered for 3 years. The equipment would be delivered to Krishnapatnam ultra mega power project, Chitrangi power project and Tilaiya ultra mega power project, as well as the Rosa, Butibori, and Sasan plants,” said the Report of Aid Data. It also says Bank of China and China’s Exim Banks and certain Chinese Government agencies also part of this big loan bonanza to Anil Ambani’s firms to pump Chinese equipment in India’s Telecom and Power sectors.
According to the report, at one point in 2014, the Chinese Banks have valued these loans with interest of more than 18 Billion Dollars as dues. Industry experts analyse that the Chinese don’t consider this as a big loss and treats as an advantage as they have able to push their equipment in India’s Telecom and Power Sector.
The Aid Data’s relevant portions of Chinese Banks’ loans given to Anil Ambani’s Reliance Group companies are shown in the graphs below:
Latest posts by Team PGurus (see all)
- Dubai based businessman C C Thampi alias Kallu Thampi’s arrest sends shockwaves to Sonia Gandhi and family - January 21, 2020
- Whistleblower accuses Times of India group of not paying tax for Rs.28,000 crores income earned from advertising for the past two decades. Exposes ‘Brand Capital’ Fraud - January 20, 2020
- Why Anil Ambani controlled news agency IANS floated news of K V Kamath as new Finance Minister - January 19, 2020