ED Summons Anil Ambani in FEMA Case

New Delhi: The Enforcement Directorate summoned industrialist Anil Ambani to its headquarters in Delhi on November 14 in connection with an investigation under the Foreign Exchange Management Act (FEMA).

ED is investigating alleged illegal foreign remittances, undisclosed foreign assets and offshore entities linked to Ambani and companies in the Reliance Anil Ambani Group (RAAG).

a specific allegation in a FEMA investigation related to Reliance Infrastructure Limited (R-Infra, part of RAAG); here ED alleged that Rs 40 billion from the Jaipur-Reengus highway project was “siphoned” abroad through shell companies from Surat to Dubai and a larger international hawala network worth over Rs 600 crore was detected.

The investigation includes searches for “illegal remittances abroad” at various facilities of R-Infra under FEMA (six facilities in Mumbai and Indore). Investigations are also ongoing into undisclosed offshore assets and entities linked to Ambani’s group, established in jurisdictions such as Jersey, British Virgin Islands (BVI) and Cyprus.

ED stated that the hawala network associated with these transactions “exceeds Rs 600 crore”. A specific figure of Rs 40 million is stated for the remittance sent abroad for the highway project.

In the 2023 interrogation, Ambani was questioned for over seven hours in a FEMA case arising from the IT department’s findings of undeclared offshore assets worth nearly Rs 800 billion.

On August 5 this year, ED had also recorded Ambani’s statement on various points regarding the loan transactions given to him. Ambani requested a period of seven days to provide necessary details and supporting documents. He was later questioned in connection with an ongoing investigation into an alleged loan fraud of Rs 17,000 crore.

ED is investigating Reliance Communications Ltd’s loan fraud of over Rs 14,000 billion. It is noteworthy that Minister of State for Finance Pankaj Chaudhary confirmed in Parliament that the State Bank of India (SBI) has classified Reliance Communications (RCom) and its promoter Anil Ambani as “fraudsters” in line with the RBI rules.

SBI has notified the RBI about this classification and is preparing to file a complaint with the Central Bureau of Investigation (CBI). Reliance Communications Ltd also allegedly cheated Canara Bank of more than Rs. 1,050 crore.

Senior sources confirmed that undisclosed foreign bank accounts and foreign assets are also being investigated.

Earlier, ED had also said that it had found that Reliance Mutual Fund had invested Rs 2,850 Million in YES Bank’s AT-1 bonds (perpetual FDs) for questionable consideration. “These bonds were eventually registered and the money was siphoned off. This was the money of the people, the mutual fund investors. CBI is also investigating this matter.”

Further, based on information received from SEBI, ED found that Reliance Infra transferred huge amount of money in the garb of ICD to RAAGA’s Group Companies through Company C, an unnamed related party company.

Reliance Infra did not disclose Company C as a related party to avoid seeking proper approval from shareholders and the audit committee. “It was also likely concealed to circumvent the checks and balances imposed by law on related party transactions,” the agency said.

R Infra was found to have made a deduction of Rs 5,480 crore and only Rs 4 crore was received in cash. ED had earlier said, “The remaining Rs 6,499 billion was resolved mainly in the form of allocation and transfer of assets/economic rights in certain Discoms. These Discoms do not have any business and are not in operation for many years. Therefore, the chances of recovery of this amount are nil. In this case, the credit diversion is over Rs 10,000 billion.” he added.

Recently, ED’s Special Task Force annexed 132 acres of land worth Rs 4,462.81 billion in Dhirubhai Ambani Knowledge City (DAKC) in Navi Mumbai under the Prevention of Money Laundering Act (PMLA), 2002.

This supplement is from Reliance Communications Ltd. (RCOM), Reliance Commercial Finance Ltd. It comes in connection with the ongoing investigation into bank fraud cases involving Reliance Home Finance Ltd. and Reliance Home Finance Ltd. The total value of assets seized by ED in cases linked to Reliance Anil Ambani Group has now risen to over Rs 7,500 billion, including previous attachments worth Rs 3,083 billion.

The money laundering investigation stems from the Central Bureau of Investigation (CBI) FIR registered under sections 120-B, 406 and 420 of the Indian Penal Code and sections 13(2) read with section 13(1)(d) of the Prevention of Corruption Act in which RCOM, Anil Ambani and others have been named.

According to ED, RCOM and its group companies took loans from both domestic and foreign lenders between 2010 and 2012 and the total outstanding dues amounted to Rs 40.185 billion. “Five banks have since declared the group’s accounts fraudulent.”

The investigation revealed that loans provided by one entity were used to repay debts of other group companies, diverted to related parties or invested in investment funds in violation of the terms of the loan. The agency claimed that over Rs 13,600 million of loans were diverted for permanent greening, Rs 12,600 Million were transferred to connected parties and about Rs 1,800 Million were invested in fixed deposits and investment funds, which were later liquidated and diverted to group entities.

The ED also found widespread abuse of bill discounting mechanisms and allegations of funds being siphoned abroad through foreign remittances. The agency reiterated its commitment to pursuing financial crime cases and ensuring that the proceeds of crime are recovered and returned to their rightful owners.