50 companies, 35 locations: ED raids Anil Ambani's Reliance Group in Rs 3,000 crore scam

The Enforcement Directorate on Thursday carried out a massive search operation across over 35 locations in connection with a money laundering investigation into Reliance Anil Ambani Group Companies (RAAGA Companies).

The search operation is being conducted under Section 17 of the Prevention of Money Laundering Act (PMLA), spanning over 50 companies and more than 25 individuals connected to the case.

According to a senior probe agency official, the money laundering probe stems from FIRs earlier registered by the Central Bureau of Investigation (CBI) and also information shared by other institutions like National Housing Bank, SEBI, National Financial Reporting Authority (NFRA), and Bank of Baroda.

According to ED, the investigation has uncovered a well-planned scheme involving illegal diversion of public money through fraudulent means, allegedly involving cheating of banks, shareholders, investors, and other financial institutions.

The agency is also probing allegations of bribery involving officials of Yes Bank, including its promoter.

Preliminary findings suggest that loans amounting to approximately Rs 3,000 crore were illegally diverted from Yes Bank between 2017 and 2019.

The ED has found that just before these loans were sanctioned, entities linked to Yes Bank promoters received significant financial transfers, raising concerns of a quid pro quo arrangement.

"Gross violations have been identified in the loan approval process. Credit Approval Memorandums (CAMs) were allegedly backdated, and investments were proposed without any due diligence, in clear violation of the bank’s credit policy," the officer said.

The loans were reportedly routed to various group and shell companies, flouting basic banking norms. Some of the major red flags identified by ED include loans issued to financially weak entities, lack of proper documentation and credit assessment, borrowers sharing common addresses and directors, diversion of funds to promoter group entities, "Evergreening" of loans to keep defaults off record, loans disbursed either on or before the date of application or sanction and even misrepresentation of financial statements.

As per the officer, SEBI has shared its observations with ED regarding Reliance Home Finance Ltd (RHFL), where the agency has flagged a dramatic surge in corporate loans -- from Rs 3,742.60 crore in FY 2017–18 to Rs 8,670.80 crore in FY 2018–19. The ED is examining irregularities, including expedited loan approvals and process deviations.

Today’s search operations were conducted under Section 17 of the Prevention of Money Laundering Act (PMLA) and spanned over 50 companies and more than 25 individuals connected to the case.