Targeted Witch Hunt: Anil Ambani Under Siege

India.com

2 days ago

Targeted Witch Hunt: Anil Ambani Under Siege
In a move that has reignited accusations of a relentless smear campaign against Anil Ambani by corporate rivals, the State Bank of India (SBI) has branded Reliance Communications' (RCom) loan account as 'fraud' without giving any hearing to the former telecoms tycoon. SBI said it had reported Anil Ambani as a fraud to the Reserve Bank of India (RBI) on July 1, 2025. Surprisingly, the SBI may have misused its powers of an ex-parte order, issued without a personal hearing, which cites a 2020 forensic audit alleging ₹12,692.31 crore in fund diversions from a ₹31,580 crore loan dating back to 2016. Ex-parte orders are issued in emergency and SBI's reliance on the forensic audit report available with it for 5 years shows no emergency.
SBI's action echoes a failed attempt by Canara Bank in November 2024, which was stayed by the Bombay High Court in February 2025 for procedural violations. Ambani's legal team has slammed SBI's move as a 'gross violation' of natural justice, RBI guidelines, and judicial precedents, pointing to a pattern of regulatory overreach that consistently overshadows positive developments in Ambani's business ventures.
The SBI's fraud classification is marred by procedural flaws, including the withholding of the full forensic audit report and reliance on a December 2023 show-cause notice (SCN) issued under outdated RBI guidelines, superseded by revised directives in July 2024. Ambani's counsel argues that SBI's failure to respond to communications for nearly a year led him to believe the matter was resolved, and the selective targeting of Ambani—while SCNs against other non-executive directors were withdrawn—suggests a vendetta possibly fueled by corporate rivalries.
This is not an isolated incident; in May 2025, Reliance Power faced allegations of submitting fake SBI guarantees for a government tender, leading to a temporary blacklisting, though Ambani avoided personal liability. Similarly, in August 2024, SEBI banned Ambani and 24 entities from the stock market over alleged fund diversion at Reliance Home Finance, a decision currently under appeal. These incidents, often amplified by media, coincide with positive milestones, such as Reliance Power's debt-free status and a joint venture with a US defense contractor in July 2025, fueling speculation of a coordinated effort to tarnish Ambani's legacy.
The pattern of regulatory and legal actions against Ambani is striking, particularly as they often emerge during periods of business recovery. For instance, the SEBI ban followed Reliance Infrastructure's reported net worth recovery to ₹33,000 crore, while SBI's fraud tag came amid Reliance Power's expansion into clean energy and defense, including a deal to supply artillery shells to a German firm. The 2020 UK bankruptcy declaration, where Ambani claimed to have 'nothing meaningful' in personal wealth, garnered global headlines, yet subsequent court reliefs, like the Delhi High Court's 2021 status quo order on RCom's fraud classifications, received less attention. Critics argue that these actions, often stalled by courts for procedural lapses—as seen in the Bombay High Court's rebuke of Canara Bank's 'cut, copy, paste' fraud order—reflect a broader agenda, possibly linked to Ambani's past rivalry.
SBI's latest move also disregards protections under the Insolvency and Bankruptcy Code (IBC), particularly Section 32A, which shields companies under the Corporate Insolvency Resolution Process (CIRP) from pre-insolvency liabilities once a resolution plan is approved. RCom, managed by a Resolution Professional since May 2018 with a debt of ₹48,216 crore as of March 2025, awaits National Company Law Tribunal (NCLT) approval for its resolution plan. Yet, SBI persists in targeting Ambani for pre-CIRP loans, a move critics say undermines the IBC framework and risks derailing RCom's revival.
This echoes earlier controversies, such as the 2018 allegations of fund diversion at Reliance Naval and Engineering, which led to insolvency proceedings but no conclusive evidence against Ambani personally. The recurring cycle of high-profile accusations, followed by judicial stays or dismissals, as seen in the Canara Bank case and SEBI's ongoing appeal, underscores a pattern of regulatory aggression that legal experts predict will face another judicial rebuke, further exposing the apparent witch hunt against Anil Ambani.
Pattern of Smear Campaign: The SBI fraud tag, SEBI ban, and Reliance Power tender controversy illustrate a pattern where regulatory actions coincide with Ambani's business recovery efforts, such as Reliance Power's debt-free status and defense contracts. These incidents, often amplified by the media, are frequently stalled by courts due to procedural flaws.
Procedural Violations: SBI's ex-parte order, like Canara Bank's failed fraud tag, violates RBI's Master Directions on Frauds and principles of natural justice by denying Ambani a hearing and full audit disclosure. The SEBI ban also faces challenges for similar reasons.
Selective Targeting: SBI's withdrawal of SCNs against other RCom directors while pursuing Ambani, despite his non-executive role, mirrors the selective scrutiny in the Reliance Power tender case, where only the SECI chief faced consequences.
Judicial Precedents: The Bombay High Court's February 2025 stay on Canara Bank's fraud tag and the Delhi High Court's 2021 order highlight a judiciary critical of banks' overreach. The SEBI ban's appeal and SBI's order are likely to follow suit.
Corporate Rivalry: While speculative, the timing of actions against Ambani, are often linked to his rivalry.
IBC Protections: SBI's pursuit of pre-CIRP liabilities disregards IBC Section 32A, aligning with criticisms of banks undermining insolvency processes, as seen in Reliance Naval's case.
Other Incidents: The 2024 SEBI ban and 2025 Reliance Power tender controversy, alongside earlier issues like Reliance Naval's insolvency, reflect a consistent pattern of regulatory scrutiny that often lacks conclusive evidence against Ambani personally but generates significant negative publicity. ‎