The Enforcement Directorate (ED) has found in its probe against Reliance Communications Limited (RCOM) that even before the corporate insolvency resolution proceedings against the company were initiated the Anil Ambani led Reliance Group “effected a mechanism to influence the resolution process” by way of acquiring loans so as to become a part of the committee of creditors, agency officials familiar with the investigation said.
The agency has also found that loans were diverted in mutual funds, related parties or infrastructure firms of Anil Ambani.
The financial crimes probe agency has now issued a fresh summon to Anil Ambani asking him to appear before it on November 14 in connection with the case, the officials, who asked not to be named on Thursday. The industrialist was earlier questioned on August 5 in connection with other Reliance Group related cases.
The Reliance Group did not respond to a request for comment on the fresh summons to Anil Ambani and the allegations in the ED attachment order.
ED’s probe against RCOM and Anil Ambani is based on a Central Bureau of Investigation (CBI) first information report (FIR) filed on August 21. The agency, earlier this week (on November 3), attached 132 acres of land at Dhirubhai Ambani Knowledge City (DAKC) in Navi Mumbai worth ₹4,462 crore in a probe into RCOM , in addition to 42 other properties worth ₹3,083 crore including Anil Ambani’s Pali Hill residence and Reliance Centre in Delhi attached last week in other cases.
The allegation is that RCOM owed over ₹40,000 crore to various lenders with the State Bank of India alone facing a loss of ₹2929.05 crore on account of its loans to the company.
According to the ED’s attachment order of November 3 under the Prevention of Money Laundering Act (PMLA), reviewed by HT, SBI had sanctioned credit facilities to RCOM, Reliance Telecom Ltd (RTL), and Reliance Infratel Limited (RITL). The agency has referred to the group as Reliance – Anil Dhirajlal Ambani Group (RAAG).
ED said the credit facilities availed by RAAG “have been fraudulently misutilized as follows: loans taken by one entity from one bank were utilized for repayment of loans taken by other entities from other banks, transfer to related parties, investments in mutual funds, which was in contravention to the terms and conditions of the sanction letter of the loans; certain loans were siphoned off outside India through foreign outward remittances; diverted to infrastructure companies of Anil Ambani such as Reliance Infrastructure Ltd and CLE Pvt. Ltd. in violation of the sanctioned loan terms.”
“The genesis of the fraud is primarily a consortium/multiple banking arrangement (MBA) involving credit facilities availed by the RAAG, wherein the accused individuals and companies in conspiracy with each other have availed credit facilities by misrepresentation and deception, and after disbursal of the same, misappropriated the funds of the banks by entering into transactions which were in violation of the terms and conditions of sanction of the credit facilities. However, it is also relevant to mention here that RAAG also undertook credit facilities from non-consortium banks during the same period, which comprise a set of interconnected transactions as the credit facilities taken from consortium banks have been used for payments of non-consortium credit facilities as well,” the ED attachment order added.
The agency said credit facilities availed from non-consortium banks from April 2013 to March 2017 including loans from HDFC Bank, Standard Chartered Bank, Yes Bank, HSBC, ICICI Bank, Deutsche Bank, Axis Bank, DBS Bank, Industrial and Commercial Bank of China, and other banks are “also a part of the investigation”.
It’s attachment order said “investigation has further revealed that even before the initiation of CIRP (corporate insolvency resolution process) of RCOM, the Reliance Group was aware of this eventuality and had effected a mechanism to influence the resolution process of these companies (RCOM, RITL and RTL) by way of acquisition of outstanding loans of these companies by related party non-banking financial companies (NBFCs) so as to become a part of the Committee of Creditors.”
