ED attaches assets worth over Rs 3,000 crore in money laundering case against Anil Ambani

The Enforcement Directorate (ED) has attached assets worth more than Rs 3,000 crore linked to Reliance Group Chairman Anil Ambani as part of a money laundering investigation against his group companies, official sources said on Monday.

These include over 40 properties — from the Pali Hill residence of the Ambani family to properties in Delhi, Noida, Ghaziabad, Mumbai, Pune, Thane, Hyderabad, Chennai, Kancheepuram (Tamil Nadu), and East Godavari (Andhra Pradesh). The attachments reportedly took place over the weekend, sources added.

The orders were issued on October 31, under Section 5(1) of the Prevention of Money Laundering Act (PMLA) for attachment.

The above-mentioned attached assets include office premises, residential units and land parcels. The attached properties also include the Reliance Centre on Maharaja Ranjeet Singh Marg in New Delhi.

Sources further informed that the aggregate value attached across the four orders is approximately Rs 3,084 crore.

The case concerns the alleged diversion and laundering of public funds raised by Reliance Home Finance Ltd (RHFL) and Reliance Commercial Finance Ltd (RCFL).

During 2017-2019, Yes Bank invested Rs 2,965 crore in RHFL instruments and Rs 2,045 crore in RCFL instruments. These turned into non-performing investments by December 2019, with Rs 1,353.50 crore then outstanding for RHFL and Rs 1,984 crore for RCFL.

The ED investigation found that direct investment by the erstwhile Reliance Nippon Mutual Fund into Anil Amabni Group financial companies was not legally possible due to SEBI’s mutual fund conflict-of-interest framework.

In violation of these guidelines the money invested by general public in the mutual fund was reportedly routed indirectly through Yes Bank exposures, which ultimately landed with Anil Ambani Group companies.

The investigation showed that funds were reportedly routed indirectly through Yes Bank’s exposures to RHFL and RCFL, while RHFL and RCFL extended loans to entities linked to the Reliance Anil Ambani group.

The fund-tracing by the ED found diversion of funds, on-lending to group-linked entities and ultimate siphoning off.

Substantial portions of corporate loans (General Purpose Corporate Loans) ultimately landed in accounts of Reliance group companies. While extending these loans, serious control failures were found by ED.

The loans to group linked companies were speed-processed without core prudential checks. Many loans were processed on the same day as application, sanction and agreement, and in some cases, disbursal preceded sanction.

The funds were advanced even before the application for loan, which can be possible only if the applicant time travelled. Field investigation and personal discussions were waived.

Documents were left blank, overwritten and undated, several borrowers had weak financials or negligible operations, the probe found.

Also security creation was inadequate or unregistered and security schedules were left blank, and the end use did not match the sanction conditions. The ED found these intentional and consistent control failures.

The anti-money laundering agency has also intensified probe in Reliance Communications Ltd (RCOM) and related companies loan fraud scam.

The ED has found that these companies diverted over Rs 13,600 crore used in evergreening loans, over Rs 12,600 crore was allegedly diverted to connected parties and over Rs 1,800 crore was invested in FDs/MFs etc., which was substantially liquidated for rerouting to group entities.

Huge misuse of bill discounting for the purpose of funnelling funds to connected parties has also been detected by the ED.

The ED continues to trace proceeds of crime and secure attachments of property, sources informed further.