Mumbai, June 13: A special Prevention of Money Laundering Act (PMLA) court in Delhi on Saturday granted the Enforcement Directorate (ED) five days’ custody of Gautam Bhailal Doshi, a former senior executive of the Reliance Anil Dhirubhai Ambani (ADA) Group, in connection with a money laundering investigation linked to an alleged Rs 40,000-crore bank fraud involving Reliance Communications (RCom) and its group companies.
Special Judge Gaurav Rao, acting as the vacation judge at the Rouse Avenue Court, remanded the 74-year-old Doshi to ED custody until June 18 after he was produced at the judge’s residence early Saturday morning. The federal agency had sought a 14-day remand following Doshi’s arrest on June 12, arguing that custodial interrogation was essential to uncover a complex mechanism of domestic and international fund layering, identify ultimate beneficiaries, and determine the role of offshore entities allegedly used to siphon funds.
Doshi served as one of the Group Managing Directors of the Reliance ADA Group and was also a director of Reliance Telecom Ltd till 2020. In its remand application, the ED described him as an executive who occupied a position of substantial authority within the group and was closely associated with its financial, corporate and offshore operations.
Allegations Of Loan Diversion
According to the ED, the case relates to credit facilities availed by Reliance Communications Ltd, Reliance Telecom Ltd and Reliance Infratel Ltd from a consortium of banks. The agency alleged that loans were obtained through misrepresentation and deception and that funds were subsequently diverted in violation of the terms and conditions governing the sanctioned credit facilities.
The ED further submitted that the Reliance ADA Group had simultaneously availed loans from non-consortium lenders and that the transactions formed part of an interconnected financial arrangement in which funds borrowed from consortium banks were allegedly used to service liabilities owed to non-consortium lenders. The agency claimed that the aggregate outstanding dues to consortium and non-consortium lenders amounted to nearly Rs 40,000 crore, which it has treated as proceeds of crime.
Funds Routed Through Offshore Entities
Investigators also alleged that portions of the loan proceeds were routed through a network of domestic and overseas entities instead of being utilised for their sanctioned purposes. According to the ED, some funds were remitted abroad and transferred to offshore companies and foreign bank accounts, while others were invested in mutual funds or diverted to group entities.
ED Flags Key Role Of Doshi
The ED told the court that Doshi occupied a position of substantial authority within the Reliance ADA Group and was closely associated with its financial, corporate and offshore operations. According to the agency, he functioned as one of the group’s managing directors, served as a director of Reliance Telecom Ltd during the relevant period, was a member of its audit committee, and exercised banking authority over 161 bank accounts maintained by 105 group entities.
The agency further alleged that Doshi was involved in matters relating to overseas borrowings, foreign currency convertible bonds (FCCBs), offshore entities and foreign bank accounts. Referring to email communications, internal board records and other documents collected during the investigation, the ED argued that he played a significant role in the management and supervision of the financial framework through which funds were raised, routed and deployed.
Court Observations And Custody Order
The court noted that material collected during the investigation, including email communications and internal board records, prima facie indicated Doshi’s involvement in the management and supervision of the financial framework under investigation.
Responding to the arrest, a Reliance ADA Group spokesperson said that while Doshi had served as a Group Managing Director and held board positions across several group entities, he had ceased to be associated with the conglomerate in 2020.
Defence Challenges Arrest
Opposing the custody plea, Doshi’s counsel argued that there were no grounds for arrest or custodial interrogation. The defence submitted that he had cooperated throughout the investigation and had appeared before the agency whenever required. It also cited his age and medical condition while opposing the ED’s request for a longer period of custody.
After hearing both sides, the court held that custodial interrogation was required to ascertain the alleged conspiracy behind the diversion of funds, establish the complete money trail, and identify the role of other individuals involved in the transactions.
Custody Conditions Set By Court
The court directed the ED to conduct Doshi’s medical examination every 24 hours at a government hospital and ensure that prescribed medicines are provided to him. It also permitted him to meet his lawyer for 45 minutes each day and family members for 15 minutes daily in the presence of the investigating officer.
The ED also arrested Satish Seth, another former Reliance ADA Group Managing Director and former Vice-Chairman of Reliance Infrastructure, in Mumbai on Friday. Following his arrest, Seth was briefly admitted to Mumbai’s Sir J.J. Hospital, after which a Mumbai PMLA court granted the agency a 48-hour transit remand to produce him before the jurisdictional court in Delhi by Sunday.
Also Watch:
The ED has, in recent weeks, intensified its probe into alleged financial irregularities involving Reliance ADA Group companies, carrying out searches at multiple locations and examining the movement of funds across a network of domestic and overseas entities.
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