After SBI, Bank of India tags RCom, Anil Ambani as fraud

According to a regulatory statement, Bank of India, following the State Bank of India, designated the loan account of insolvent Reliance Communications as fraudulent and named its former director, tycoon Anil Ambani, citing alleged fund diversion in 2016.

In August 2016, Reliance Communications received a loan of Rs 700 crore from the state-owned Bank of India to cover its continuing capital and operating expenses as well as the repayment of its outstanding debts. According to the bank’s letter that RCom revealed in a stock exchange filing, half of the sanctioned sum released in October 2016 was invested in a fixed deposit, which was prohibited by the sanction letter.

The Bank of India decided “to classify the loan accounts of the company, Anil Dhirajlal Ambani (promoter and former director of the company), and Manjari Ashok Kacker (former director of the company), as Fraud,” according to a letter that RCom received on August 22 from the bank on August 8.

In June of this year, State Bank of India (SBI) had previously taken the same action, claiming that bank funds had been embezzled through transactions that went beyond the terms of the loans. The Central Bureau of Investigation (CBI) raided Reliance Communications and Ambani’s home on Saturday after receiving a complaint from SBI.

After the State Bank of India claimed a loss of Rs 2,929.05 crore due to purported embezzlement by Reliance Communications and Ambani, the younger sibling of Asia’s richest man Mukesh Ambani, the CBI announced it had filed a case.

In a statement, Anil Ambani’s spokeswoman stated he “will duly defend himself” and “strongly denied all allegations and charges.”

SBI’s complaint concerns issues that have existed for over a decade. Ambani was not involved in the day-to-day operation of the company during the relevant time and was a non-executive director, according to the spokeswoman.

“It is pertinent to note that SBI, by its own order, has already withdrawn proceedings against five other non-executive directors. Despite this, Ambani has been selectively singled out.” Reliance

According to the most recent filing, communications stated that its subsidiary Reliance Telecom Ltd. also received a letter from Bank of India stating the lender’s decision to label the company’s loan accounts, those of Grace Thomas (a former RTL director and current director), and a few other individuals as “fraud.”

According to banking regulations, if an account is found to be fraudulent, it must be reported to law authorities for criminal prosecution. Additionally, the borrower is prohibited from obtaining new loans from banks and other regulated organizations for a period of five years.

In the letter included in the Reliance Communications filing, Bank of India stated that RCom had become non-performing on June 30, 2017, with an outstanding balance of Rs 724.78 crore.

“The Bank has been pursuing the borrowers and guarantors to collect the outstanding balance; however, they have not fulfilled their obligations.” In April, Reliance Communications said that, as of March, its total debt was Rs 40,400 crore.

The business was admitted for insolvency and bankruptcy procedures as a result of unpaid loans. A Committee of Creditors, headed by SBI and supervised by a Resolution Professional, is in charge of managing RCom.