Anil Ambani-linked firms raided by ED in ₹3,000 crore Yes Bank loan fraud case

The Enforcement Directorate (ED) on Thursday conducted simultaneous raids on Anil Ambani group companies as part of a money laundering probe linked to an alleged loan fraud of ₹3,000 crore, newswire PTI reported.

More than 35 premises in Mumbai and Delhi of 50 companies are being searched under the Prevention of Money Laundering Act (PMLA), the report said.

According to media reports, preliminary investigations show that loans worth around ₹3,000 crore, sanctioned by Yes Bank between 2017 and 2019, were allegedly diverted to shell firms and other group entities.

Investigating officials have also found evidence suggesting possible bribery of Yes Bank officials. The probe agency discovered that shortly before the loan was sanctioned, funds were allegedly transferred into the accounts of Yes Bank promoters, reported ANI. The ED is currently probing this suspected link between bribery and loan disbursement. Investigations have also revealed serious irregularities in the loan approval process.

The raids come days after India’s biggest public sector lender, State Bank of India, classified Reliance Communications , along with promoter director Anil Ambani, as 'fraud'. SBI, too, is in the process of lodging a complaint with the Central Bureau of Investigation (CBI).

The entities were classified as fraud on June 13, in accordance with the RBI's Master Directions on Fraud Risk Management and the bank’s Board-approved Policy on Classification, Reporting & Management of Frauds, Minister of State for Finance Pankaj Chaudhary said in a written reply in the Lok Sabha.

"On June 24, the bank reported the classification of fraud to RBI and is also in the process of lodging a complaint with CBI," he said.

On July 1, in accordance with disclosure requirements, the Resolution Professional for Reliance Communications notified the Bombay Stock Exchange about the bank’s classification of the account as fraudulent.

Reliance Communications is undergoing Corporate Insolvency Resolution Process under the Insolvency and Bankruptcy Code, 2016 (IBC). A resolution plan was approved by the Committee of Creditors and filed with the National Company Law Tribunal (NCLT), Mumbai, in 2020. The NCLT approval is awaited.

According to the Resolution Professional, the State Bank of India’s credit exposure to Reliance Communications comprises a fund-based principal outstanding of ₹2,227.64 crore, including accrued interest and charges dating back to August 26, 2016, as well as a non-fund-based bank guarantee amounting to ₹786.52 crore.

SBI has also initiated the Personal Insolvency Resolution Process under IBC against Ambani and the same is being heard by NCLT, Mumbai.

The state-run lender had earlier classified the account and promoters as "fraud" in 2020 and filed a complaint with the Central Bureau of Investigation (CBI) in January 2021. However, the complaint was returned in view of the "status quo" order by the Delhi High Court.

The fraud classification process was re-run, and the account was again classified as “fraud” after following the due process as per RBI circular dated July 15, 2024.

Clarifying on the raids, Reliance Power said the said actions have absolutely no impact on the business operations, financial performance, shareholders, employees, or any other stakeholders of Reliance Power.

"The media reports appear to pertain to allegations concerning transactions of Reliance Communications Limited (RCOM) or Reliance Home Finance Limited (RHFL) which are over 10 years old," it said.

Reliance Infrastructure Ltd, too, clarified that the ED's actions have absolutely no impact on the business operations, financial performance, shareholders, employees, or any other stakeholders of Reliance Infrastructure. "It is clarified that Reliance Infrastructure is a separate and independent listed entity with no business or financial linkage to RCOM or RHFL," it said.

"Anil D. Ambani is not on the Board of Reliance Infrastructure. Accordingly, any action taken against RCOM or RHFL has no bearing or impact on the governance, management, or operations of Reliance Infrastructure," it said.