CBI raids Anil Ambani’s house, RCom office in Rs 2,929 cr SBI fraud case

The CBI on Saturday carried out searches at the Mumbai residence of Reliance Communication Ltd (RCom) director Anil Ambani and the company’s official premises in connection with an alleged bank fraud case.

The action took place after the CBI registered an FIR on August 21 against RCom, Anil Ambani, unknown public servants and unknown others on the basis of a complaint from the SBI, which alleged a fraud and a loss of Rs 2,929.05 crore.

The accused allegedly misrepresented and got sanctioned credit facilities from the SBI in favour of RCom. The allegations pertain to misutilisation and diversion of loan funds, potential routing of loan funds, inter-company loan transactions, misutilisation of sales invoice financing, discounting of bills of RCom by Reliance Infratel Ltd, movement of funds through inter-corporate deposits and write-off of capital advances given to Netizen Engineering Pvt Ltd, a group company of Reliance ADA Group, and creation or write-off of fictitious debtors.

The issue also echoed in the Lok Sabha last month. “On June 24, the SBI reported classification of fraud to the RBI and is also in the process of lodging a complaint with the CBI,” Minister of State for Finance Pankaj Chaudhary had said in a written reply.

The SBI’s credit exposure in RCom included a fund-based principal outstanding amount of Rs 2,227.64 crore along with the accrued interest and expenses with effect from August 26, 2016, and a non-fund-based bank guarantee of Rs 786.52 crore, he had informed Parliament.

RCom is undergoing the corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016. The resolution plan was approved by the Committee of Creditors and filed with the National Company Law Tribunal (NCLT), Mumbai, on March 6, 2020. The NCLT’s approval is awaited.

The bank had also initiated a personal insolvency resolution process under the IBC against Anil Ambani and it was being heard by the NCLT, the minister said.

According to the SBI complaint, now part of the FIR, RCom, Reliance Infratel Ltd, a step-down subsidiary of RCom and Reliance Telecom Ltd, a subsidiary of RCom, cumulatively received Rs 31,580 crores from banks.

The forensic audit done in 2020 mapped the utilisation of funds obtained from banks, which flagged deviations in funds received and utilised by RCom. The utilisation was not as per the terms of sanction, it alleged. It is alleged that Rs 13,667.73 crore (44 per cent) were utilised for repayment of loans and other obligations to banks and FIIs, and Rs 12,692.31 crore (41 per cent) to pay to connected parties.

The audit underlined that Rs 6,265.85 crore obtained from banks through loans were utilised for repayment of other bank loans, Rs 5,501.56 crore of loans were used for paying related and connected parties and investment of Rs 1,883.08 crore were made from the loans received from various banks, it alleged while giving details of a number of other irregular transactions.

"Most of these investments were liquidated immediately and utilised for payments to related and non-related parties," it said.

Meanwhile, in a statement, RCom said that "Anil Ambani strongly denies all allegations and would duly defend himself”.

It said the complaint filed by the SBI pertained to matters dating back more than 10 years. "Ambani then was a non-executive director of the company, with no involvement in the day-to-day management…. The SBI, by its own order, has already withdrawn proceedings against five other non-executive directors. Despite this, Ambani has been selectively singled out," the statement said.

"At present, RCom is being managed under the supervision of a committee of creditors led by the SBI and overseen by a resolution professional. The matter remains sub judice, pending before the NCLT and other judicial forums, including the Supreme Court, for the past six years. Ambani has challenged the SBI’s declaration before the competent judicial forum,” the company said.