Anil Ambani under ED scanner in Rs.3,000 Cr fraud case
The Enforcement Directorate (ED) on Thursday conducted simultaneous raids at debt-ridden industrialist Anil Ambani’s 50 companies. The raid is at 35 places in Delhi and Mumbai. ED cases originated from two cases registered by CBI against Reliance Group of Anil Ambani for bank loan frauds and bribing bank officials to obtain loans fraudulently during 2017-2019.
More than 35 premises in Mumbai belonging to 50 companies and 25 persons are being searched under the Prevention of Money Laundering Act (PMLA), said ED officers. The investigation is being carried out by a Delhi-based investigation unit of the ED. The agency officials said they are probing allegations of illegal loan diversion of around Rs.3,000 crore, given by the Yes Bank, to the debt-ridden Group companies of Ambani between 2017 and 2019.
The ED has found that just before the loan was granted, Yes Bank promoters “received” money as a bribe. The federal probe agency is investigating this nexus of “bribe” and the loan. The agency is also probing allegations of “gross violations” in Yes Bank loan approvals to Anil Ambani Group companies, including charges like back-dated credit approval memorandums (CAMs), investments proposed without any due diligence/ credit analysis in violation of the bank’s credit policy.
The loans are alleged to have been “diverted” to many group companies and shell companies by the entities involved. The agency is also looking at some instances of loans given to entities with weak financials, a lack of proper documentation of loans and due diligence, borrowers having common addresses and common directors in their companies, etc., said officials.
The money laundering case stems from at least two CBI FIRs and reports shared by the National Housing Bank, SEBI, National Financial Reporting Authority (NFRA), and Bank of Baroda, they said.
These reports indicate that there was a “well-planned and well-thought-out scheme” to divert or siphon off public money by cheating banks, shareholders, investors, and other public institutions.
The SEBI report on Reliance Home Finance Limited (RHFL) has also formed the basis of the ED probe.
According to the market regulator’s findings, an increase in corporate loans by RHFL was seen, from Rs.3,742.60 crore in FY 2017-18 to Rs.8,670.80 crore in FY 2018-19.
“Between 2017 and 2019, Yes Bank is said to have disbursed approximately Rs.3,000 crore in loans to RAAGA companies — entities under the Reliance Anil Ambani Group. The ED claims to have detected an illegal quid pro quo arrangement wherein promoters of Yes Bank allegedly received payments in their privately held concerns just before sanctioning the loans.
The investigation has flagged several red flags, including loans issued to companies with poor or unverified financials, use of common directors and addresses across multiple borrowing entities, lack of essential documentation in sanction files, routing of funds to shell entities and instances of loan evergreening — where fresh loans were given to repay existing ones,” said ED officials in Yes Bank loan frauds by Anil Ambani’s companies.
State Bank of India (SBI) has classified Reliance Communications (RCom), a group company of Anil Ambani, and Mr Ambani himself as “fraud” accounts.
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