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The Hindu
5 hours ago
- Business
- The Hindu
SBI classifies RCom loan account as fraud, reports director Anil Ambani to RBI
In a major setback for Reliance Group chairman Anil D. Ambani, the State Bank of India (SBI) has decided to go after him by classifying its loan account of Reliance Communications Ltd. (RCom) as fraud. The country's largest public sector lender has also decided to report Mr. Ambani, the erstwhile director of RCom, to the Reserve Bank of India (RBI) seeking appropriate action as per the central bank's guidelines. The move follows a forensic audit by the bank and exchange of show-cause notices and responses spanning over a year. SBI, in a letter to RCom, intimated that its Fraud Identification Committee (FIC) had decided to classify the account as fraudulent and it had escalated the matter to the banking regulator for necessary action. The FIC's report has mentioned about significant irregularities, including fund diversion and violations of the terms and conditions of the loan. SBI's action is in line with the RBI's Master Direction on Frauds, which provides a framework to deal with entities involved in gaming the banking system. Mr. Ambani is expected to face regulatory and legal action including civil and criminal proceedings and the case might be handed over to the Central Bureau of Investigation (CBI) for further investigation. RCom, which had turned a non-performing asset (NPA), was admitted to the IBC process in May 2018, and as of March 2025, had a total debt of ₹48,216 crore. Under Section 32 A of the IBC, the company is protected from any action but its promoter faces liability and criminal proceedings. SBI's FIC on June 13, 2025 identified a consistent pattern of financial misconduct and found that RCom and its subsidiaries were engaged in found diversion and opeque transactions. The forensic audit had revealed large scale diversion of the bank's funds which were channelled through related entities, temporarily parked in mutual funds and fixed deposits and cycled via o tea day transactions. Mr. Ambani's lawyers have denied the allegations. His counsel, in response to SBI's letter to RCom said, 'State Bank of India's order referred in the RCom disclosure is shocking and has been passed ex-parte, and in violation of the principles of natural justice.' 'SBI's order is in direct contravention of various judgments of the Hon'ble Supreme Court and the Hon'ble Bombay High Court, as well as RBI guidelines,' he said. 'SBI has not even responded to Mr. Ambani's communication about the invalidity of the Show Cause Notice (SCN) for almost a year, and has not even provided the information forming the basis of their decision despite being repeatedly requested by Mr. Ambani, to enable him to respond to the SCN,' he said. 'SBI has also not allowed Mr. Ambani an opportunity of personal hearing to make submissions against its allegations,' he added. 'SBI has withdrawn the show-cause notice to other non-executive and independent directors of RCom. Mr. Ambani was also a non-executive director and not involved in the day-to-day affairs of RCOM, and has been wrongly so categorised,' he further said. Mr. Ambani is pursuing the matter as legally advised, he added.
India.com
7 hours ago
- Business
- India.com
Anil Ambani's first response to SBI in ‘fraudulent' tag matter, says it violates…, writes letter to…
Anil Ambani (File) Industrialist Anil Ambani's legal team has written to the State Bank of India, objecting to the classification of Reliance Communications' loan accounts as fraudulent. They argue that the move breaches RBI guidelines and defies court directives. In a letter dated July 2, the counsel described SBI's action as 'shocking,' stating it was issued ex-parte and in violation of the principles of natural justice. RCom Letter To SBI SBI's order is in direct contravention of various judgments of the Supreme Court and the Bombay High Court, as well as RBI guidelines, the counsel said. RCom in a filing to stock exchanges on Wednesday said that SBI is classifying its loan account as fraudulent, citing alleged diversion of funds in a case dating back to 2016. SBI, the counsel said, has also not allowed Ambani an opportunity of personal hearing to make submissions against its allegations. The counsel in the letter said SBI has not even responded to Ambani's communication about the invalidity of the show cause notice (SCN) for almost a year, and has not even provided the information forming the basis of their decision despite being repeatedly requested to enable him to respond to the SCN. SBI Withdraws Show Cause Notice SBI has withdrawn the show cause notice to other non-executive and independent directors of RCom. Ambani was also a non-executive director and not involved in the day-to-day affairs of RCom, and has been wrongly so categorized, the counsel said, adding Ambani is pursuing the matter as legally advised. 'The Bank's SCN dated December 20, 2023 had been issued prior to the revised RBI Master Directions dated July 15, 2024 which completely superseded the directions under which the SCN had been issued (and which are no longer in existence), the Bank would need to withdraw the said SCN. 'Given the extended silence of almost one year on behalf of the Bank to this communication, our Client (Ambani) was under the bonafide belief that Bank has accepted our Client's position in respect and did not intend to precipitate the matter,' it said. (With Inputs From PTI)
Time of India
8 hours ago
- Business
- Time of India
SBI marks Reliance Communications as fraud account; company says order ex-parte
State Bank of India (SBI) has classified the loan account of Reliance Communications (RCom) as fraud diversion of sanctioned loan amounts to pay connected parties, inter-company loan transactions and investments and misutilisation of sales invoices. The bank will take further action against the company and its former promoter director, Anil Ambani by reporting them to the Reserve Bank of India (RBI), according to a letter posted on the stock exchanges. In response to the stock exchange disclosure, Delhi based Agarwal Law Associates on behalf of their clients RCom and Anil Ambani expressed shock at what they said was an ex-parte order of SBI. 'Vide our letter dated October 21, 2024 we had submitted that as the bank's show cause notice (SCN) dated December 20, 2023 had been issued prior to the revised RBI Master Directions dated July 15, 2024 which completely superseded the directions under which the SCN had been issued (and which are no longer in existence), the bank would need to withdraw the said SCN,' the law firm said. Agarwal Associates said that after almost a one-year silence by SBI, RCom and Anil Ambani was under the impression that the bank had accepted the client's position and did not intend to precipitate the matter. The law firm also said that similar allegations against various other people have been dropped after the RBI master directions and Anil Ambani should also get that benefit. 'We reiterate that our client was not a whole-time director but was a non-executive director on the board of RCom and not responsible for the day to day functioning and operations of RCom which was undertaken by the key management personnel,' the law firm said in its letter addressed to the SBI fraud monitoring department , the bank's chairman, manging director and deputy managing director. Agarwal Associates said their clients were provided an incomplete copy of the forensic audit report (FAR) and without any underlying documents. 'The failure to provide all the documents has prevented our client from giving his detailed response to the allegations set out in the SCN and making submissions that there was no violation of the sanctioned facilities,' the law firm said. Ambani was also not given the opportunity of a personal hearing in the matter, Agarwal Associates said. In its detailed notice to the company SBI said after the Supreme Court order in March 2023 which said that promoters of companies have to be given a hearing before they are declared as fraud, the bank reversed its 'fraud' tag on RCom and its promoters. 'As part of the re-initiation of the process of fraud identification in the account, SCNs were served to the borrower and its promoters, directors dated December 20, 2023 for giving an opportunity of hearing in adherence to the principles of natural justice before deciding on identification and reporting of account as fraud…' SBI said in its letter. Another notice with a forensic audit report was sent to the promoters, directors again in March 2024 and another one in September 2024. The resolution professional had replied to the notices from SBI in January 2024, saying that nothing should constraint the bank from pursuing any action against hr erstwhile directors, management or employees of the company for fraudulent or actions of omissions. SBI follows, its peer Canara Bank which had also classified RCom as fraud citing similar reasons like routing of loan amounts to settle liabilities with connected parties and inter-company transactions . RCom and its subsidiaries had taken loans totalling Rs 31,580 crore from banks.
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Business Standard
8 hours ago
- Business
- Business Standard
SBI marks Reliance Com loan as 'fraud', reports Anil Ambani to RBI
Reliance Communications has disclosed to the exchanges that the country's largest lender, State Bank of India (SBI), has decided to classify its loan account as 'fraud' due to irregularities in the conduct of the account. It has also decided to report both the account and Anil Dhirajlal Ambani, who was a director at the company, to the Reserve Bank of India (RBI) in accordance with the central bank's guidelines. 'We have taken cognisance of the responses (wherever received) to our SCN (show-cause notice) and after due examination of the same it is concluded that sufficient reasons have not been provided by the respondent to explain the non-adherence to the agreed terms and conditions of the loan documents or the irregularities observed in the conduct of the account of Reliance Communications to the satisfaction of the bank,' SBI said in a letter to Reliance Communications on June 23, which the company received on June 30. The company, however, clarified that the classification of 'fraud' by SBI is not expected to have any impact on its operations. It is also seeking legal advice on the way forward with respect to this development. The company, which is currently undergoing the Corporate Insolvency Resolution Process (CIRP) and has a resolution plan approved by its Committee of Creditors—currently awaiting approval from the National Company Law Tribunal (NCLT)—said the credit facilities referred to by the bank pertain to the period prior to the CIRP. As per the Insolvency and Bankruptcy Code (IBC), such claims are required to be resolved as part of the resolution plan or during liquidation, as the case may be, it said. Meanwhile, Anil Ambani's lawyers, responding to SBI's notice classifying Reliance Communications' account as fraud, said the bank had not responded to Ambani's communication challenging the validity of the SCN for almost a year, and had also not granted him a personal hearing to make submissions against the allegations. Additionally, they stated that the bank had withdrawn SCNs issued to other non-executive and independent directors of the company, but had not done so for Ambani despite his being a non-executive director not involved in the day-to-day affairs of the company. The account was declared a non-performing asset (NPA) by the bank in August 2016. Following this, in October 2020, the bank had identified the account as 'fraud' and reported the name of the borrowing entity and its promoters, directors and guarantors to the RBI. However, this classification was challenged in court and subsequently reversed. The bank later reinitiated the process of fraud identification and served SCNs to the borrower and its promoters, directors and suspended directors in December 2023. In March 2024, SBI sent the forensic audit report to the promoters, directors and suspended directors, offering them an opportunity to make submissions, if any. Meanwhile, Anish Nanavaty, resolution professional (RP) of Reliance Communications, responding to the bank's SCN on behalf of the corporate debtor in January 2024, said the bank could pursue any action against the erstwhile management, employees and personnel of the corporate debtor for any fraudulent action committed prior to the cutoff date. Anil Ambani also responded to the bank's SCNs in January and March 2024, seeking documents and materials relied upon by the bank. In May 2024, Ambani, in his response, challenged the validity of the forensic audit report. According to the bank, Reliance Communications, RITL and RTL received Rs 31,580 crore from banks, of which 44 per cent was used for loan repayments and 41 per cent for payments to connected parties. 'Utilisation of funds obtained from banks was traced and its utilisation was mapped from the sanction letter. Instances were identified where utilisation of loan amount was not as per terms mentioned in the sanction letter,' the bank said. Additionally, there was potential rerouting of bank loan funds and internal transfer of funds among Reliance Communications, RITL and RTL. Further, large portions of the loan proceeds were invested in fixed deposits and mutual funds, among other instruments. Reliance Communications was admitted into CIRP in 2019. Lenders submitted claims amounting to around Rs 49,000 crore. Once among the largest telecom players in the country, Reliance Communications was the flagship firm of the Reliance Group.
23-06-2025
- Politics
FBI, DHS host call with governors over US threat environment after Iran strikes
Senior FBI and Homeland Security officials hosted conference calls with some of the nation's governors and top law enforcement officials on Sunday to discuss how the U.S. missile strikes in Iran impact an already dangerous threat environment, sources told ABC News. The calls included one with hundreds of state and local law enforcement officials from around the country and another with state governors and their staff. An FBI official said on the call that the agency's "posture is going to be enhanced" after the U.S. military action against Iran. The FBI is asking more personnel to be in the office, and continuing to "canvas sources" and monitor intelligence. Sources said there is currently no specific intelligence of a direct, credible threat against the U.S. homeland. The call with governors was meant to ensure that states are aware of the current threat environment and to encourage them to reach out to relevant state agencies, infrastructure partners and others who may be at risk, sources said. Federal officials specifically urged governors and their staff on the call to be vigilant for an uptick in cyber activity within their states and encouraged them to reach out to relevant state agencies, private sector infrastructure partners, and others who may be at risk, including Jewish institutions or groups associated with Israel. The call with law enforcement also included a representative from the Secure Community Network (SCN), a Chicago-based organization that helps protect Jewish institutions across the country and shares intelligence with the FBI and DHS. SCN's national director and CEO, Michael Masters, said on the call that the decision by the U.S. government to join Israel's military campaign against Iran "opens up a new chapter for all of us," and that Jewish institutions and Jewish leaders within the U.S. "should be considered at an elevated risk" for retaliatory violence. He said that in the hours right after the U.S. launched its strikes, SCN identified more than 1,600 "violent posts directed to the Jewish community on social media." A number that he said continues to grow. Expressing concern over what Iran might do in response to the U.S. military action, Masters said, "Historically, as many of us know, the intelligence community has determined that Iran would not strike in the U.S. unless a red line was crossed. …The so-called red line of the Iranian response doctrine was crossed." And Jim Dunlap, the deputy secretary for analysis at the Department of Homeland Security's Office of Intelligence and Analysis, said the U.S. strike against Iran "raises the threat environment here in the United States." But he also said that, "from a terrorism perspective, we assess that Tehran's retaliatory efforts against the homeland are probably dependent upon the extent to which it believes U.S. actions threaten the regime's stability." "We have not yet observed the Iranians call for direct violence in the homeland," he added, though he said DHS is "closely" monitoring for "specific calls to violence and threats against the homeland." Without offering specifics, Dunlap said that "recent law enforcement disruptions" in the U.S. "could challenge Iran's ability to execute a plot in the homeland in the immediate term." The calls come after Homeland Security issued a bulletin calling on the public to report anything suspicious to officials with DHS Secretary Kristi Noem stating flatly that what's happening in Iran brings the potential for increased threats to the homeland in the form of "possible cyberattacks, acts of violence and antisemitic hate crimes." All state governors were invited to the call, but not all were able to make it for various reasons, so for some only their staff members attended, sources said.
