Mumbai: The Central Bureau of Investigation (CBI) which has initiated a probe against M/s Reliance Communication Ltd. (RCOM), Mumbai, its director Anil D. Ambani and others on the complaint of State Bank of India (SBI) in connection with Rs 2929.05 crores alleged loan default case, stated in its FIR that there had been inter-company loan transactions amounting to Rs 2,219 crores, which according to bank were done through alleged manipulation of books of accounts to misappropriate the fund sanctioned by the bank and breach of trust with dishonest intention.
Criminal Case Registered Under IPC and Prevention of Corruption Act
On August 21, the CBI had registered a criminal case on charges of criminal conspiracy, cheating, criminal breach of trust and criminal misconduct under the provisions of Indian Penal Code and Prevention of Corruption Act on the basis of a complaint received from SBI Mumbai against M/s Reliance Communication Ltd. (RCOM), Mumbai, its director Anil D. Ambani, unknown public servants and unknown others on the allegations of defrauding the bank, and thereby causing wrongful loss of Rs 2929.05 crores to the bank.
Background of Loans and Fresh Sanctions
"Reliance Communications limited (RCOM) established in December 2002 was providing wireless, wireline, and IT infrastructure services in India and abroad together with its subsidiary companies. RCOM exited the consumer mobile service business in Dec- 2017. While the company was already enjoying non-fund based working capital facilities from SBI Mumbai since 2004, the bank sanctioned fresh term-loan of Rs 1,500 crore in September 2012 to meet capital expenditure, operating expenditure requirements and repayment of existing liabilities. Further, an additional short-term loan of Rs. 565 crore was sanctioned on 30.08.2016 to refinance scheduled liabilities of external commercial borrowings," the CBI stated in its FIR.
Forensic Audit Revealed Alleged Fraudulent Transactions
"The fraud perpetrated by the accused persons came to light when Forensic Auditor M/s BDO India LLP submitted its report dated 15.10.2020 to the SBI. The report was a combined report for all the three companies of RCOM Group - Reliance Communications Ltd (RCOM), Reliance Telecom Ltd (RTL) and Reliance Infratel Ltd (RITL). The period covered in the report is from 01.04.2013 to 31.03.2017. The accused persons in conspiracy with each other and unknown others have induced the lenders to avail the credit facilities by misrepresentation and deception and after disbursal of the same, misappropriated the funds of the banks by entering into transaction which were in violation of the terms and conditions of sanction of the credit facilities," the CBI stated in its FIR.
Funds Diverted Through Inter-Company Transfers
The FIR further stated, "RCOM, RITL and RTL have transferred the bank loan funds internally among themselves. RCOM has transferred Rs. 783.77 crores to RTL and Rs. 1435.24 crores to RITL from loans obtained from banks. It has been observed in various transactions that company/ management has not transferred directly to the company which requires funds but has made transactions through various associates, subsidiaries. Reason for the same has not been provided by the management or Mr Anil Ambani. It appears that management of the company and promoter has done these transactions through manipulation of books of accounts to misappropriate the fund and breach of trust with dishonest intention."
Allegations of Diversion and Misutilisation of Loan Funds
Further, the allegations pertain to mis-utilization and diversion of loan funds, potential routing of loan funds, mis-utilization of sales invoice financing, discounting of bills of RCOM by M/s Reliance Infratel Ltd., movement of funds through inter corporate deposits, write off of capital advances given to M/s Netizen Engineering Pvt. Ltd.- a group company of Reliance ADA Group, and creation/write off of fictitious debtors, etc. On August 23, searches were carried out by the CBI at the premises linked to RCOM and Anil Ambani.
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Ambani’s Spokesperson Denies Allegations
A spokesperson for Ambani in a statement issued following the search had said "The complaint filed by State Bank of India (SBI) pertains to matters dating back more than 10 years. At the relevant time, Mr. Ambani was a Non-Executive Director of the company, with no involvement in the day-to-day management. It is pertinent to note that SBI, by its own order, has already withdrawn proceedings against five other Non-Executive Directors. Despite this, Mr. Ambani has been selectively singled out. At present, Reliance Communications is being managed under the supervision of a Committee of Creditors, led by SBI and overseen by a Resolution Professional. The matter remains sub judice, pending before the NCLT and other judicial forums, including the Hon’ble Supreme Court, for the past six years. Mr. Ambani has duly challenged SBI’s declaration before the competent judicial forum. Mr. Ambani strongly denies all allegations and charges, and will duly defend himself."
