ED seizes ₹1,452-crore assets in Reliance Communications money-laundering case

India's directorate of enforcement (ED) said on Thursday it has attached multiple properties worth ₹1,452 crore, in an alleged money-laundering case involving Reliance Communications Ltd (RCom).

Founded as part of Anil Dhirubhai Ambani’s Reliance Group, RCom is currently undergoing bankruptcy resolution in the National Company Law Tribunal.

The ED said its special task force has provisionally frozen multiple buildings in Dhirubhai Ambani Knowledge City (DAKC) and Millenium Business Park, Navi Mumbai, as well as plots of land and buildings in Pune, Chennai, and Bhubaneshwar, cumulatively worth ₹1452.51 crore under the provisions of Prevention of Money Laundering Act (PMLA), 2002.

The financial crime-fighting agency said that it earlier attached properties worth over ₹7,545 crore in the alleged bank fraud cases of Reliance Communications Ltd (RCom), Reliance Commercial Finance Ltd, and Reliance Home Finance Ltd.

The agency started investigation on the basis of a first information report registered by the Central Bureau of Investigation (CBI) under various sections of Indian Penal Code and Prevention of Corruption Act against RCom and certain individuals.

Reliance denial

A spokesperson for Anil Ambani's Reliance Group said that as per ED's press statement, 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.

“The company has been undergoing the corporate insolvency resolution process (CIRP) for over six years. All matters relating to its resolution are currently sub-judice before the Hon’ble National Company Law Tribunal (NCLT), and the Hon’ble Supreme Court of India.”

During the insolvency resolution, the professional appointed by creditors runs the affairs of the company on behalf of creditors, and explores its revival including through ownership change or asset sale.

“Reliance Communications is presently managed by a Resolution Professional under the supervision of the NCLT /Committee of Creditors (CoC), led by the State Bank of India (SBI) and a consortium of banks / lenders. Mr. Anil D. Ambani is in no way involved with Reliance Communications and has resigned six years ago in 2019,” said the company statement.

“The attachment order has no material impact on the operations, performance, or future prospects of Reliance Infrastructure and Reliance Power. Both the companies continue to operate as usual, maintaining their focus on growth, operational excellence, and their commitment to all stakeholders, especially the over 50 lakh strong shareholder family.”

Anil D. Ambani has also not served on the board of directors of either Reliance Infrastructure or Reliance Power for over three and a half years, the statement said.

ED’s allegations

ED alleged that RCom and its group companies availed loans from domestic and foreign lenders from the period of 2010-2012 onwards, of which a total amount of ₹40,185 crore is outstanding. Nine banks have declared the loan accounts of the group as fraud, ED stated.

The agency said investigation has revealed that loans taken by one group entity from one bank were utilized for repayment of loans taken by other entities from other banks, transfer to related parties, and investments in mutual funds, which was in contravention to the terms and conditions of the sanction letter of the loans.

In particular, RCom and its group companies diverted over ₹13,600 crore for evergreening of loans, over ₹12,600 crore was diverted to connected parties, and more than ₹1,800 crore was invested in fixed deposits or mutual funds, which was substantially liquidated for rerouting to group entities, ED alleged.

Huge misuse of bill discounting for the purpose of funneling funds to connected parties has also been detected by ED, the agency alleged.

“The total attachment in these cases stands at Rs. 8,997 crore,” ED said. It said that the agency is actively pursuing perpetrators of financial crimes and is committed to restituting proceeds of crime to their rightful claimants.