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Anil Ambani, the ex-Director of the now-defunct Reliance Communications Ltd, finds himself in yet more trouble after the State Bank of India said it will report the company's loan account as a 'fraud'.
The 'fraud' declaration, and Mr Ambani's name, will be reported to the Reserve Bank of India, SBI said in an exchange filing. And the public sector bank's move is likely to be followed by other lenders who have given loans to Reliance Communications, or RCom, as the company is sometimes called.
RCom - navigating insolvency - is part of the Anil Ambani-led Reliance Group. A resolution plan has been approved by creditors and is awaiting approval from the National Company Law Tribunal.
Downfall Of Anil Ambani
Once one of the world's richest men, Anil Ambani's one-time flourishing empire has crumbled under charges of frauds, fund diversions, forged guarantees, and defaults, in India and abroad.
Apart from SBI's action against RCom, disputes involving Reliance Power in 2024, Reliance Capital in 2018/19, and Reliance Infrastructure in 2011, have contributed to the downfall since.
Reliance Power
In May 2024 the chief of the Solar Energy Corporation of India, or SECI, was dismissed for allegedly allowing Reliance Power to participate in solar project bids using forged bank documents.
In November the company was barred by from participating in tenders for three years.
However, after legal proceedings SECI stood down and the Delhi High Court lifted the ban.
Reliance Capital
Between 2018 and 2020 Price Waterhouse Coopers and Grant Thornton both flagged financial impropriety that prompted an inquiry by the Securities Exchange Board of India, or SEBI.
In 2018 and '19 PWC audits flagged Rs 12,751 crore in suspected fraudulent loans and investments to group companies. The company dropped Reliance Capital in 2020, alleging obstruction of its work.
At the same time Grant Thornton found Rs 12,000 crore was diverted via Reliance Housing Finance.
The SEBI inquiry led to bans and a Rs 25 crore fine against Mr Ambani and others.
Reliance Infrastructure
Reliance Infrastructure, or RInfra as it is sometimes called, faced an insolvency order from the National Company Law Tribunal. This was over a default of Rs 88 crore related to a 2011 energy purchase agreement with Mumbai-based Dhursar Solar Power Pvt Ltd, or DSPPL.
RInfra contested the order. It argued that Rs 92.68 crore, including principal and interest, had been paid and this made the insolvency plea not maintainable.
On appeal, the National Company Law Appellate Tribunal suspended the earlier order.
The next hearing on this matter is on July 18.
SEBI Ban
On the personal front, Anil Ambani was banned from entering the securities market for five years by SEBI after diverting funds from Reliance Home Finance Limited. The ban - which prohibits him from trading in securities and being associated with the market - is in effect till August 2029.
Bankruptcy In UK
In 2020 Anil Ambani declared personal bankruptcy in a British court.
He said he lacked funds to pay even legal fees.
This followed a lawsuit by the Industrial and Commercial Bank of China, the China Development Bank, and the Export-Import Bank of China over defaulted loans to Rcom worth $925 million.
Mr Ambani allegedly provided a personal guarantee, and a London court ruled in favor of the banks, ordering him to pay over $716 million, including interest and costs.
The banks are now pursuing recovery from Mr Ambani's global assets.
SBI's 'Fraud' Charge Against RCom
The latest blow - SBI's 'fraud' tag - follows on from a 2016 notification by the bank that identified fund diversion, irregular accounting, and book manipulation through related RCom entities.
Canara Bank had acted before SBI, marking RCom a 'fraudulent borrower' in September 2024.
According to SBI, RCom and its subsidiaries received Rs 31,580 crore in bank loans.
SBI has said there were 'deviations' in how these loans were utilised, and that these 'deviations' involved 'complex web of fund movements across multiple group entities'.
'...sufficient reasons have not been provided by the respondent (i.e., RCom) to explain non-adherence to agreed terms and conditions of loan documents, or irregularities observed..." it said.
Reports indicate 44 per cent of these loans were used to repay financial obligations, while another 41 per cent was used to pay connected parties. But sums of Rs 6,265.85 crore and Rs 5,501.56 crore were used to repay other bank loans and sent to parties not aligned with sanctioned purposes.
Mr Ambani, who led RCom during this time, is the younger brother of Mukesh Ambani, who is the Chairman and Managing Director of Reliance Industries.
What Anil Ambani Said
A law firm representing Mr Ambani responded to the State Bank's charge.
The law firm said Mr Ambani had been 'shocked' to receive the ex-parte - i.e., an order passed without hearing both sides - of the Fraud Identification Committee.
The bank, the firm said, had not responded to Mr Ambani's last letter and that their client was a non-executive director, and not a full-time director, during the period mentioned.
He 'was not responsible for RCom's day-to-day operations' and was not given a chance to defend himself, the law firm said, demanding the State Bank withdraw its 'fraud' classification.
