After SBI, Bank Of India Tags Anil Ambani, Reliance Communications' Accounts 'Fraud'

Days after the State Bank of India (SBI) declared Reliance Communications' (RCom) accounts as ‘fraud', the Bank of India (BOI) has also classified the loan accounts of the company, its promoter Anil Ambani, and Reliance Telecom as fraudulent, the company informed stock exchanges on Sunday.

The bank has alleged diversion of funds and violation of loan terms. According to a company stock exchange filing, RCom received a letter dated August 8 from BOI on August 22.

In its notice, BOI said the loan accounts of RCom, Anil Dhirajlal Ambani, and Manjari Ashik Kacker had been tagged as ‘fraud' for an outstanding loan of Rs 724.78 crore.

The bank noted that the account turned non-performing (NPA) in June 2017 and despite repeated follow-ups, the borrowers and guarantors failed to repay the dues.

"The account of Borrower turned NPA on 30.06.2017 with outstanding of Rs 724.78 Crores. The Bank has been following up with the Borrowers and Guarantors for repayment of dues, however, they have failed and neglected to make repayment of the dues," BOI said in its letter, as shared by the company in its filing.

BOI also issued a similar notice to Reliance Telecom Limited, declaring its account as ‘fraud' along with those of its directors Grace Thomas and Satheesh Seth.

This was related to a default of Rs 51.77 crore. Others named in connection with the case include Gautam Bhailal Doshi, Dagdulal Kastruchand Jain, and Prakash Shenoy.

RCom and its subsidiaries had borrowed a total of Rs 31,580 crore from various banks.

Meanwhile, the Central Bureau of Investigation (CBI) has intensified its probe as on Saturday, officials carried out searches at two locations in Mumbai, including the residence of Anil Ambani and the office premises of RCom.

This action was linked to a fresh case of alleged bank fraud worth Rs 2,929.05 crore, registered on August 21 following a complaint by SBI.

The complaint accused RCom, Anil Ambani, unidentified public servants, and others of cheating the bank by misrepresenting facts to secure loans.

Investigators claim that the borrowed funds were diverted through multiple channels such as inter-company loan transactions and inter-corporate deposits.

The CBI has also pointed to irregular practices, including misuse of sales invoice financing, discounting of RCom bills by Reliance Infratel, routing of funds through group entities, and writing off of capital advances given to Netizen Engineering Pvt. Ltd., another company under the Reliance ADA Group.

However, a spokesperson for Ambani said in a statement that the allegations are baseless and he will duly defend himself.

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