The Supreme Court on Wednesday directed the Enforcement Directorate to form a Special Investigation Team focused on investigating allegations of large-scale bank fraud by Reliance Communications, its parent entities, and Reliance Group Chairman Anil Ambani. According to reports from NDTV Profit, the apex court also highlighted an undertaking of Ambani's counsel Mukul Rohatgi wherein he assured that his client will not leave the country without court permission, and that all preventive action will be taken to not hamper the probe. This legal intervention marks a significant deepening of the investigation into alleged financial irregularities linked to loans totaling over ₹40,000 crore advanced between 2010 and 2012.
The focus of the probe centers on RCom and its affiliates, which had taken loans totaling more than ₹40,000 crore from Indian and foreign banks between 2010 and 2012. As reported by NDTV Profit, five of these accounts have since been declared fraudulent by the lending banks. The initiation of the probe began after an FIR was first registered on a complaint by the State Bank of India, and the scope was broadened to cover similar complaints by other banks including Bank of Maharashtra, Bank of Baroda, and Bank of India. The Supreme Court's observation of past sluggishness from both the ED and CBI underscores a demand for a swift and thorough investigation.
The Central Bureau of Investigation has been tasked by the Court to identify any bank officials who may have been complicit in the alleged fraud. According to NDTV Profit, the Supreme Court noted that both the CBI and ED have been sluggish with their probes and said that it now expects them to conduct a fair investigation. The court has directed both agencies to inform it about the progress of their investigation in the matter periodically. The CBI has been specifically tasked to investigate complicity among bank officials, while the ED continues its asset attachment operations.
The Enforcement Directorate has been actively attaching assets across multiple cases, with total seizures now approaching ₹12,000 crore. These attachments include properties, bank balances, and shareholdings, significantly impacting the group's asset base. Reliance Communications, which filed for bankruptcy in 2019, carried a debt burden of approximately ₹49,000 crore. Investigations have revealed defaults and alleged fraudulent diversions across various group entities, with figures ranging from ₹14,000 crore to over ₹78,000 crore in defaults for entities like Reliance Commercial Finance Ltd and Reliance Home Finance Ltd. Anil Ambani himself has been questioned by the ED multiple times in connection with these alleged diversions and money laundering activities.
The continued association with these extensive investigations and fraud allegations invariably impacts investor sentiment, potentially increasing borrowing costs and making it difficult to attract new capital for the diversified Reliance Group businesses. The systemic nature of the allegations, encompassing potential collusion by bank officials and a history of regulatory actions including SEBI barring Anil Ambani from securities markets, creates a challenging financial and governance environment. While specific market capitalization or P/E ratios for the delisted RCom are not applicable, other Reliance Group companies like Reliance Power face liquidity challenges, and Reliance Infrastructure's credit profile indicates stretched liquidity despite potential capital raises. Competitors in the Indian telecom sector, such as Bharti Airtel and Reliance Jio, maintain robust market positions and financial health, highlighting a stark contrast with the ongoing financial and legal distress impacting RCom and related entities.
