The Enforcement Directorate (ED) has launched an extensive money laundering probe into the Reliance Anil Ambani Group (RAAG) and several associated entities, as part of its crackdown on large-scale loan frauds.
In a written response to the Rajya Sabha on the increasing incidence of such frauds, the government disclosed that the ED's investigation is linked to two cases registered by the CBI in September 2022.
The ED initiated its investigation through an Enforcement Case Information Report (ECIR) on July 22, targeting multiple entities and individuals, including Reliance Home Finance Ltd. (RHFL), Reliance Commercial Finance Ltd. (RCFL) & former Yes Bank MD and CEO Rana Kapoor, among others.
According to details shared in Parliament, RHFL and RCFL disbursed loans totalling Rs 12,524 crore, a significant portion of which was extended to entities classified as either shell companies or closely linked affiliates of ADAG group firms.
Of this amount, Rs 6,931 crore was eventually declared as non-performing assets (NPAs) or written off entirely.
The ED noted that these funds were often routed back to flagship firms of the Anil Ambani Group, such as Reliance Capital Ltd. (RCL), Reliance Infrastructure Ltd. (RIL), and Reliance Power Ltd. (RPL), through a "circular lending".
The probe also highlighted the alleged role of Rana Kapoor, who was at the helm of Yes Bank during the time of these transactions. He allegedly authorised large investments in RHFL and RCFL without obtaining proper board approvals.
Further scrutiny revealed that Kapoor's wife's firms-RAB Enterprises, Bliss House, and Imagine Estate-received suspicious loans from the same NBFCs, raising serious questions about conflict of interest and quid pro quo arrangements.
Investigations have been backed by key forensic findings. A forensic audit conducted by Grant Thornton and a parallel probe by SEBI exposed multiple irregularities, including diversion of funds, evergreening of loans, backdated approvals, and failure of corporate governance mechanisms within RHFL and RCFL.
Supporting documents reviewed by the ED include communications from the National Housing Bank (NHB), orders from the Securities and Exchange Board of India (SEBI) and the National Financial Reporting Authority (NFRA), and internal assessments by statutory auditors, including PwC.
In response to these findings, the ED launched a major search and seizure operation on July 24, covering 60 companies and 22 individuals allegedly linked to the laundering of loan proceeds.
Notably, in June this year, the State Bank of India declared Reliance Communications and its promoter, Anil Ambani's account, as "fraud", informing the Reserve Bank of India and filed a complaint with the CBI. The investigators have since then seized several documents and records from their offices in Mumbai and Delhi as part of a wider probe into suspected misuse of public funds through a web of shell companies.
This case has surfaced at a time of heightened parliamentary concern over the sharp uptick in high-value loan fraud across the banking and NBFC sectors.
