ED seizes ₹1,452-crore assets in Reliance Communications loan fraud probe
India’s enforcement directorate (ED) said on Thursday that multiple properties worth more than one value have been seized. ₹1,452 crore in the alleged money laundering case involving Reliance Communications Ltd (RCom).
RCom, set up as part of Anil Dhirubhai Ambani’s Reliance Group, is currently seeking insolvency in the National Company Law Tribunal.
The ED said the special task force has temporarily frozen several buildings in Dhirubhai Ambani Knowledge City (DAKC) and Millennium Business Park, Navi Mumbai, as well as land and buildings worth cumulatively in Pune, Chennai and Bhubaneshwar. ₹1452.51 crore under the provisions of the Prevention of Money Laundering Act (PMLA), 2002.
The anti-financial crime agency said it had previously seized properties above their value ₹$7.545 billion in cases of alleged bank fraud by Reliance Communications Ltd (RCom), Reliance Commercial Finance Ltd and Reliance Home Finance Ltd.
The agency initiated investigation based on various sections of the Indian Penal Code and the first information report registered by the Central Bureau of Investigation (CBI) under the Prevention of Corruption Act against RCom and certain persons.
disclaimer of trust
A spokesperson for Anil Ambani’s Reliance Group said that the attached assets belong to Reliance Communications, which has not been a part of the Reliance Group since 2019, that is, for the last six years, as per ED’s press release.
“The company has been going through the corporate insolvency resolution process (CIRP) for over six years. All matters relating to its resolution are currently being decided before the Hon’ble National Company Law Tribunal (NCLT) and the Hon’ble Supreme Court of India.”
During bankruptcy resolution, the creditor-appointed professional handles the company’s affairs on behalf of creditors and explores the company’s revival, including a change of ownership or asset sales.
“Reliance Communications is currently managed by a Resolution Professional under the supervision of NCLT / Committee of Creditors (CoC) led by State Bank of India (SBI) and a consortium of banks/lenders. Mr. Anil D. Ambani is not involved in any way with Reliance Communications and resigned six years ago in 2019,” the company said in its statement.
“The attachment order has no material impact on the operations, performance or future prospects of Reliance Infrastructure and Reliance Power. Both companies continue to operate as usual, maintaining their commitment to growth, operational excellence and to all stakeholders, especially the 50+ lakh strong shareholder family.”
Anil D. Ambani has also not served on the board of Reliance Infrastructure or Reliance Power for more than three and a half years, the statement said.
ED’s claims
ED, RCom and group companies have used loans from domestic and foreign credit institutions since 2010-2012, and the total amount of this ₹40,185 crore is an extraordinary figure. ED stated that nine banks declared the group’s loan accounts as fraudulent.
The Authority revealed during the investigation that the loans received by a group entity from a bank were used for the purpose of repayment of loans received by other entities from other banks, transfers to related parties and investment in investment funds, which was contrary to the terms and conditions of the loan sanction letter.
Especially RCom and its group companies, ₹13,600 crore for continuous renewal of loans ₹12,600 crore was transferred to connected parties and more than 12,600 crore was transferred to connected parties. ₹ED alleged that Rs 1,800 crore was deposited in fixed deposits or mutual funds and these were largely liquidated to be routed to group entities.
The agency claimed that gross misuse of bill discount was also found by ED to divert funds to linked parties.
“The total lien in these cases is worth Rs 8,997 million,” ED said. It was stated that the organization actively pursues the perpetrators of financial crimes and is determined to return the proceeds of crime to their rightful owners.
