The Enforcement Directorate (ED) has reportedly launched a full-blown crackdown on premises linked to Reliance Group chairman Anil Ambani in Delhi and Mumbai, in connection with a money laundering case. Acting on two FIRs registered by the Central Bureau of Investigation (CBI), the ED is pursuing allegations of massive financial misconduct.
However, these are initial reports and a confirmation of financial irregularities is yet to be established.
Media reports claimed that ED officials raided and combed through records at over 50 firms allegedly tied to the case. More than 25 individuals were interrogated, while simultaneous search operations were carried out at nearly 35 locations. The agency’s preliminary probe has uncovered what it describes as an intentionally thought-out scheme to siphon off public money by misleading banks, shareholders, investors and other public institutions.
Reports added that between 2017 and 2019, Yes Bank reportedly extended loans amounting to approximately Rs 3,000 crore to RAAGA companies — entities belonging to the Reliance Anil Ambani Group. The ED claims it has unearthed an unlawful quid pro quo arrangement whereby payments were funneled into privately held concerns of Yes Bank promoters just before these massive loans were sanctioned.
According to the investigation, cited by news reports, loans were disbursed to companies with questionable or unverifiable financials. Identical directors and addresses were used across several borrowing entities. Among other claims, there has been absence of key documentation in sanction files. The investigation reportedly found out that funds were diverted to shell entities. Additionally, there has been recurring instances of loan evergreening where fresh loans were issued merely to repay outstanding dues.
Reports, attributing unnamed officials, said that alleged irregularities were abetted by senior executives and promoters of Yes Bank. The ED suspects these officials may have received personal payments or kickbacks in exchange for greenlighting massive unsecured loans to certain RAAGA companies.
Furthermore, the State Bank of India (SBI) has designated Reliance Communications (RCom), a Reliance Group company, and Anil Ambani himself, as questionable accounts.
Notably, this isn’t the first time SBI has made such a declaration. The bank had previously classified RCom and Mr Ambani as fraudulent accounts in November 2020 and submitted a complaint to the CBI on January 5, 2021. The very next day, however, the Delhi High Court issued a status quo order, compelling the bank to withdraw its complaint.
Multiple financial and regulatory institutions have joined the fray, submitting their findings to the ED. These include the National Housing Bank (NHB), Securities and Exchange Board of India (SEBI), the National Financial Reporting Authority (NFRA), and the Bank of Baroda.
SEBI, in particular, has furnished a report flagging grave irregularities in Reliance Home Finance Limited (RHFL), another group company. According to the report, RHFL’s corporate loan portfolio witnessed an alarming surge — from Rs 3,742 crore in FY 2017–18 to a staggering Rs 8,670 crore in FY 2018–19, media outlets added.
The suspected offences also reportedly involve the bribery of high-ranking bank officials, including former promoters of Yes Bank Ltd, to push through colossal unsecured loans.
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