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Business Upturn
03-07-2025
- Business
- Business Upturn
Reliance Communications stock in focus today as SBI classifies loan as ‘fraud', implicates Anil Ambani
By Aditya Bhagchandani Published on July 3, 2025, 08:40 IST Shares of Reliance Communications Ltd (RCom) are expected to remain in focus today after the company disclosed that State Bank of India (SBI) has moved to classify its loan account as fraud — a step that also implicates former director Anil Ambani. In a stock exchange filing on July 1, RCom said SBI intends to report Ambani's name to the Reserve Bank of India (RBI), sparking another round of legal battle amid the company's ongoing insolvency proceedings. The classification stems from a forensic audit conducted by BDO in 2020, which led SBI's fraud panel to flag the account. Notably, Canara Bank had declared the loan as fraud in November 2024, though that order was later overturned by the Delhi High Court. Ambani's legal team termed SBI's move 'ex parte' and in breach of natural justice, arguing that show-cause notices issued were outdated under revised RBI rules. They maintained that Ambani had no executive role at RCom during the period in question and accused SBI of failing to share key documents required for a response. SBI's June 13 review reportedly cited financial irregularities, including the alleged diversion of ₹12,692 crore — about 41% of total loans worth ₹31,580 crore — to connected parties. The findings claim sanctioned funds were misused, routed through subsidiaries, and masked via inter-company loans and circular transactions. RCom, currently under an NCLT-appointed resolution professional, stated that the classification would have 'no impact' given protections under the Insolvency and Bankruptcy Code. Ambani's lawyers further argued that SBI's decision defied rulings of the Supreme Court, the Bombay High Court, and RBI guidelines, and called for withdrawal of the order and a personal hearing. Meanwhile, RCom's shares were trading actively today as investors assessed the implications of the development. Ahmedabad Plane Crash Aditya Bhagchandani serves as the Senior Editor and Writer at Business Upturn, where he leads coverage across the Business, Finance, Corporate, and Stock Market segments. With a keen eye for detail and a commitment to journalistic integrity, he not only contributes insightful articles but also oversees editorial direction for the reporting team.
Time of India
02-07-2025
- Business
- Time of India
SBI flags Anil Ambani's RCom loan a/c as fraud
In a step that also implicates the company's former director , has moved to classify the loan account of as fraud. In a disclosure on July 1, RCom stated that SBI plans to report Ambani's name to the . Tired of too many ads? go ad free now The move sets off another round of legal contest amid the telco's ongoing insolvency proceedings. The classification traces back to a 2020 forensic audit by BDO, which prompted SBI's fraud panel to flag the account. Canara Bank had earlier declared the loan as fraud in Nov 2024, but that order was later set aside by Delhi HC. Ambani's lawyers said SBI's order was passed ex parte and in breach of natural justice. SBI tags RCom as 'fraud a/c' over alleged fund diversion MUMBAI: SBI has moved to classify the loan account of Reliance Communications as fraud, a step that implicates Anil Ambani, its former director. RCom disclosed the decision on July 1, stating that the country's largest bank plans to report Ambani to RBI. The move sets off another round of legal contest amid the telco's insolvency proceedings. The classification traces back to a 2020 forensic audit by BDO, which prompted SBI's fraud panel to flag the account. Canara Bank declared the loan as fraud in Nov 2024, but that order was later set aside by the Delhi high court. Ambani's lawyers from Agarwal Law Associates said that SBI's order was passed ex-parte and in breach of natural justice. They argued that the show-cause notices are outdated under revised RBI rules, that Ambani had no executive role in the company's operations, and that SBI failed to provide key documents needed for a reply. They called for the withdrawal of the order and asked for a personal hearing. In its latest review concluded on June 13, a committee of SBI flagged several financial irregularities. Tired of too many ads? go ad free now These included alleged diversion of Rs 12,692 crore, which was 41% of the loans of Rs 31,580 crore, to connected parties. The findings allege that sanctioned funds were misused, routed through subsidiaries to mask transactions, and used in inter-company loans that manipulated the company's books. Circular transactions involving ICDs and intraday limits were also cited as attempts to raise funds by concealing facts. RCom, which is under an NCLT-appointed resolution professional, said the classification would have "NA" impact, pointing to protections available under the Insolvency and Bankruptcy Code. These include immunity from past actions once a resolution plan is in place. Ambani's lawyers said the SBI order defies several rulings by the Supreme Court and the Bombay high court, along with RBI norms. They said SBI ignored Ambani's objections for nearly a year and did not disclose the basis of its decision. Although similar notices were withdrawn against other non-executive and independent directors, Ambani, who held a comparable position, has been unfairly targeted, they said.
