Anil Ambani’s Reliance Group is facing increased regulatory scrutiny as various agencies like the Enforcement Directorate (ED), Central Bureau of Investigation (CBI), Securities and Exchange Board of India (SEBI), and now the Ministry of Corporate Affairs (MCA) have launched a fresh investigation into alleged fund diversions within multiple group companies, including Reliance Infrastructure, Reliance Communications, Reliance Commercial Finance, and CLE Pvt Ltd.
The MCA’s initial findings have prompted the transfer of the case to the Serious Fraud Investigation Office (SFIO) due to indications of significant fund siphoning and substantial violations under the Companies Act. The SFIO is set to delve into the money flow within the group entities and identify accountability at the senior management level, with subsequent actions based on the investigation’s results.
This development coincides with the ED’s intensified crackdown on the debt-laden conglomerate, which recently seized assets valued at nearly Rs 7,500 crore from Reliance Group entities.
The attached properties encompass 30 assets of Reliance Infrastructure and properties associated with Adhar Property Consultancy, Mohanbir Hi-tech Build, Gamesa Investment Management, Vihaan43 Realty, and Campion Properties, linked to a multi-crore bank fraud case involving Reliance Infrastructure.
The ED’s investigation revolves around loans raised by Reliance Communications (RCOM) and its affiliated companies between 2010 and 2012, with outstanding dues totaling Rs 40,185 crore, leading five banks to flag the loan accounts as fraudulent.
Investigators allege that funds were diverted among group entities, channeled to related parties, and even utilized to repay earlier borrowings against loan terms. The ED accuses that funds meant for business operations were misappropriated for servicing existing debts, a practice termed “evergreening.”
The ED suspects that approximately Rs 13,600 crore was funneled through layered transactions, including moving some funds overseas. Entities like Reliance Home Finance, Reliance Commercial Finance, Reliance Infrastructure, and Reliance Power are implicated in the investigation.
Earlier in August, the CBI and ED conducted searches at Anil Ambani’s and senior group officials’ premises, leading to the subsequent arrest of a senior finance executive connected to the group.
Several Reliance Group firms have faced insolvency proceedings due to mounting debt pressures, with RCOM already undergoing insolvency proceedings and other entities entangled in legal battles and recovery pursuits by creditors.
The MCA’s decision to hand over the investigation to SFIO signifies a more comprehensive probe into the group’s financial practices and heightened emphasis on accountability. Meanwhile, the ED’s asset seizures and the lenders’ classification of fraud pose significant legal and financial hurdles for the conglomerate.