Mumbai
Reliance Group Chairman Anil Ambani is being questioned by the ED (Enforcement Directorate) in the money laundering case related to bank loan fraud of Rs 17,000 crore. The federal investigative agency issued summons on August 1 asking him to appear in his New Delhi office today. He reached Delhi on Tuesday morning with a flight from Mumbai and appeared in the ED office for questioning.
The inquiry is being led by the officer of Assistant Director Rank. At the same time, Deputy Director and Joint Direct Rank officials are monitoring this interrogation. The ED had raided 35 bases and individuals associated with Anil Ambani’s companies a few days ago and seized important documents, other electronic gadgets including computer hard drives. The investigating agency has written a letter to the banks and also sought details of the approved loan to the companies of Anil Ambani.
The ED has written a letter to 12-13 public and private banks seeking details of the appropriate investigation conducted on the loan given to Reliance Housing Finance, Reliance Communications and Reliance Commercial Finance. Sources said that details have also been sought from State Bank of India, Axis Bank, ICICI Bank, HDFC Bank, UCO Bank and Punjab and Sindh Bank.
Loan fraud case of ₹ 17000 crore
Initial investigation of the ED has detected illegal loan transfer of about Rs 3,000 crore from YES Bank (period 2017 to 2019). The authorities later came to know about the loan fraud worth more than Rs 14,000 crore associated with Reliance Communications Limited. After this, on July 24, the ED raided 35 locations in Delhi and Mumbai for at least three days, which are associated with 50 companies and 25 people.
The ED raided several officials of Anil Ambani’s companies and more than 25 people were questioned. After this action, the shares of Anil Ambani’s companies broke badly. From Reliance Infra to Reliance Power shares, there was a lower circuit. In the last five days, the stock of Reliance Power has lost more than 11 percent. At the same time, Reliance Infra’s stock has fallen by 10 percent.
ED’s first arrest in this case
The federal investigative agency made his first arrest in connection with this case last week. The ED arrested Partha Sarathi Biswal, Managing Director of Biswal Tradalink Private Limited, on 1 August for depositing a fake bank guarantee of Rs 68.2 crore under the Money Laundering Act (PMLA), 2002. He told that this bank guarantee was given by Reliance Power. A lookout circular has also been issued against Anil Ambani.
ED registered a case after CBI
The ED also registered a case of money laundering after two FIRs were registered by the Central Bureau of Investigation (CBI). According to ED sources, the investigation is mainly related to allegations of illegal loan diversion given by YES Bank to Anil Ambani’s companies between 2017-2019. According to him, just before Anil Ambani’s companies were given loans, the promoters of Yes Bank received money in their business. The federal investigative agency is investigating this alliance of bribe and loan.
The ED has found several irregularities in its preliminary investigation, including issuing loans to companies with poor or uncomfortable financial sources, using the same director and address in loans taking the same director and address, lack of necessary documents in loans files, sanctioning loans to Shell companies, giving new loans to repay the current debt. SEBI has presented a report highlighting serious irregularities at Anil Ambani’s company, Reliance Home Finance Limited (RHFL). It said that the company’s corporate loan portfolio was almost doubled from Rs 3,742 crore for FY 2017-18 to Rs 8,670 crore in the financial year 2018-19.
Reliance Group’s response to ED action
Reliance Power and Reliance Infrastructure, two companies of Anil Ambani’s Reliance Group, had informed the stock exchange on 26 July, saying that they accept the ED’s action, but the raids had no effect on their business operations, financial performance, share holders, staff or any other stakeholders. Many regulators and financial bodies have shared their findings with the ED, including the National Housing Bank (NHB), the Security and Exchange Board of India (SEBI), the National Financial Reporting Authority (NFRA) and the Bank of Baroda.
SBI has classified Reliance Communications (RCom) and Anil Ambani himself as ‘fraud accounts’. This is not the first time that the bank has described an account as a fraud. SBI had earlier declared RCC and Anil Ambani’s bank accounts as fraud accounts in November 2020 and lodged a complaint with the CBI on 5 January 2021. The Delhi High Court issued an order of the status quo on 6 January 2021, after which the complaint was withdrawn.
