Rs 2,929 crore loan fraud: After SBI, Bank of India tags Anil Ambani and RCom accounts as fraud; violation of terms cited
NEW DELHI: Bank of India classified the loan account of debt-ridden Reliance Communications (RCom) as fraudulent and also named its former director Anil Ambani, citing alleged diversion of funds in 2016, according to a regulatory filing.The move comes after State Bank of India (SBI) took a similar step in June this year. SBI had alleged misappropriation of funds by RCom through transactions that violated loan terms.According to the disclosure made by RCom to stock exchanges, the company received a letter from Bank of India on August 22, referring to the bank’s August 8 decision “to classify the loan accounts of the company, Anil Dhirajlal Ambani (promoter and erstwhile director of the company), and Manjari Ashok Kacker (erstwhile director of the company), as Fraud.”Bank of India had sanctioned a Rs 700 crore loan in August 2016 to RCom for capital and operational expenditure as well as repayment of liabilities. However, half of the amount disbursed in October 2016 was invested in a fixed deposit, which violated the sanction terms, the bank said in its communication disclosed by RCom.Following SBI’s complaint, the Central Bureau of Investigation (CBI) on Saturday searched premises linked to RCom and Ambani’s residence. The CBI has registered a case based on SBI’s claim of a loss of Rs 2,929.05 crore due to alleged misappropriation by RCom and Ambani, PTI reported.Reacting to the development, a spokesperson for Anil Ambani said the industrialist “strongly denied all allegations and charges” and added that he “will duly defend himself.”“The complaint filed by SBI pertains to matters dating back more than 10 years. At the relevant time, Ambani was a non-executive director of the company, with no involvement in the day-to-day management,” the spokesperson said.“It is pertinent to note that SBI, by its own order, has already withdrawn proceedings against five other non-executive directors. Despite this, Ambani has been selectively singled out,” the statement added.RCom further informed exchanges that its subsidiary Reliance Telecom Ltd has also been classified as fraudulent by Bank of India, along with its erstwhile director Grace Thomas and other individuals.Under Indian banking rules, once an account is tagged as fraudulent, it must be referred to investigative agencies for criminal action, and the borrower is barred from raising fresh funds from banks and regulated financial institutions for five years.Bank of India said RCom’s account turned non-performing on June 30, 2017, with outstanding dues of Rs 724.78 crore. “The Bank has been following up with the borrowers and guarantors for repayment of dues; however, they have failed and neglected to make repayment of the dues,” the lender said in its letter disclosed by RCom.RCom, which has total debt of Rs 40,400 crore as of March, is currently undergoing insolvency proceedings under a resolution process led by SBI and overseen by a court-appointed Resolution Professional.(with inputs from news agency PTI)
