Premises linked to Reliance Group Chairman Anil Ambani were raided by the Enforcement Directorate Thursday morning. The raids were connected to a money laundering case based on complaints registered with another federal agency, the Central Bureau of Investigation.
The ED, sources said, examined records from over 50 firms and conducted searches at 35 locations across Delhi and Mumbai as part of this inquiry, and also questioned 25 people.
The preliminary results reveal a "well-planned and thought-out scheme to siphon off public money by cheating banks, shareholders, investors and other public institutions", sources said.
Once one of the world's richest men, Mr Ambani's one-time flourishing empire has crumbled under charges of frauds, fund diversions, forged guarantees, and defaults, in India and abroad.
These include the State Bank of India, the country's largest public sector lender, reclassifying the loan account of Reliance Communications, a Reliance Group company, as a 'fraud'.
READ | Anil Ambani: From 6th Richest In World To 'Fraud' Tag By State Bank
It also includes Mr Ambani being fined Rs 25 crore and banned from the securities market for five years for diversion of funds from Reliance Home Finance, another group company.
And, perhaps most infamously, it includes a notice from the Income Tax Department for evading Rs 422 crore in taxes on undisclosed funds nearly twice that amount in banks in Switzerland.
Anil Ambani's Downfall
The RCom 'fraud' tag
In June the SBI declared the RCom loan account a 'fraud' and said it would report Mr Ambani - which it has not yet done - to the CBI. The bank claimed it had identified fund diversion, irregular accounting, and book manipulation through related RCom entities.
RCom and its subsidiaries received Rs 31,580 crore in loans, the bank said.
The SBI said there were 'deviations' in how these loans were utilised, and that these 'deviations' involved 'complex web of fund movements across multiple group entities'.
READ | SBI To Report Anil Ambani To RBI, Classify RCom Account As 'Fraud'
A law firm representing Mr Ambani responded to the State Bank's charge.
The law firm said Mr Ambani had been 'shocked' to receive the ex-parte - i.e., an order passed without hearing both sides - of the Fraud Identification Committee.
Incidentally, this is not the first time the SBI has labelled the RCom account a 'fraud'.
It did so in November 2020 and filed a complaint with the CBI on January 5, 2021. But the Delhi High Court issued a status quo order on January 6, leading to the withdrawal of the complaint.
The SEBI Fine, Ban
In August markets regulator SEBI banned Mr Ambani and 24 associates, including former key officials of Reliance Home Finance, from the securities market for five years.
Mr Ambani was also fined Rs 25 crore and the company was fined an additional Rs 6 lakh.
SEBI ruled Mr Ambani, with help from senior executives at Reliance Home Finance, fraudulently siphoned more than Rs 5,000 crore by disguising them as loans to entities linked to him.
READ | Anil Ambani, 24 Others Banned From Securities Market For 5 Years
The RHFL board issued directives to stop this but the orders were ignored.
Anil Ambani used his position as 'Chairperson of the ADA group' and his significant indirect shareholding in the holding company of RHFL to orchestrate the fraud, SEBI said.
The Insurance Scam
Going back to 2018, the then-Governor of Jammu and Kashmir, Satya Pal Malik, scrapped a medical insurance scheme for government staff and their families, citing fraud.
The scheme had been provided by Mr Ambani's Reliance General Insurance via a broker, Trinity Reinsurance. Mr Malik also claimed he had been offered Rs 300 crore in bribes.
READ | J&K Ex Governor Summoned By CBI In Reliance Insurance Case
The investigation rolled on for four years till January 2024, when assets worth Rs 37 crore belonging to the company, the broker, and subsidiaries, were attached by the ED.
The Yes Bank Case
The latest hammer blow is a list of suspected offences that also involve bribery of senior bank officials, including former promoters of Yes Bank Ltd, to facilitate large unsecured loans.
Between 2017 and 2019, Yes Bank is said to have disbursed approximately Rs 3,000 crore in loans to companies operating under the Reliance Anil Ambani Group banner.
READ | Anil Ambani Raided: ED Probes 35 Premises, 50 Companies, 25 People
The ED has said it has detected an illegal quid pro quo arrangement wherein promoters of Yes Bank allegedly received payments in privately-held concerns just before sanctioning loans.
These 'loans' include those given to RHFL. According to a SEBI report, the firm's corporate loan portfolio nearly doubled from Rs 3,742 crore in FY 2017-18 to Rs 8,670 crore in FY 2018-19.
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