LOC issued against Anil Ambani in loan fraud probe

A Look Out Circular LOC was on Friday reportedly issued against Anil Dhirubhai Ambani Group ADAG Chairman Anil Ambani on the request of the Enforcement Directorate ED in connection with an alleged Rs 17000crore loan fraud case reported the IANSEarlier Anil Ambani was summoned to appear at the ED headquarters in the national capital on August 5 according to officials familiar with the matterAccording to the sources the agency will record his statement under the Prevention of Money Laundering Act PMLA once he deposes the PTI reportedSome executives of Ambanis group companies have been also been summoned over the next few daysThe summons come after the federal agency conducted searches at 35 premises of 50 companies and 25 people including executives of his business group last week The searches launched on July 24 went on for three daysThe action pertains to alleged financial irregularities and collective loan diversion pegged at more than Rs 17000 crore by multiple group companies of Anil Ambani including Reliance Infrastructure R Infra according to the PTIThe agency found on the basis of a Sebi report that R Infra diverted funds disguised as intercorporate deposits ICDs to Reliance Group companies through a company named CLE It is alleged that R Infra did not disclose CLE as its related party to avoid approvals from shareholders and audit panelsAccording to the PTI a Reliance Group spokesperson said in a statement that the allegation regarding alleged diversion of Rs 10000 crore to an undisclosed party was a 10yearold matter and the company had stated in its financial statements that its exposure was only around Rs 6500 crore Reliance Infrastructure had publicly disclosed this matter on February 9 2025 nearly six months agoThrough mandatory mediation proceedings conducted by a retired Supreme Court judge and the mediation award filed before the Honble Bombay High Court Reliance Infrastructure arrived at a settlement to recover its 100 per cent exposure of Rs 6500 crore it said as per the PTIThe company added that Ambani was not on the board of R Infra since more than three years March 2022The ED is also looking at allegations of illegal loan diversion of around Rs 3000 crore given by Yes Bank to the group companies of Ambani between 20172019The ED the sources said has found that just before the loan was granted Yes Bank promoters received money in their concernsThe agency is investigating this nexus of bribe and the loanThe sources said the ED is also probing allegations of gross violations in Yes Bank loan approvals to these companies including charges such as backdated credit approval memorandums and investments proposed without any due diligencecredit analysis in violation of the banks credit policyThe loans are alleged to have been diverted to many group companies and shell bogus companies by the entities involvedThe 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 the sources said reported the PTIThe money laundering case stems from at least two CBI FIRs and reports shared by National Housing Bank SEBI National Financial Reporting Authority and Bank of Baroda with the ED they had said as per the PTIThese reports the sources said indicate that there was a wellplanned and thought after scheme to divert or siphon off public money by cheating banks shareholders investors and other public institutionsThe Union government had informed Parliament recently that State Bank of India has classified RCOM along with Ambani as fraud and was also in the process of lodging a complaint with the CBIA bank loan fraud of more than Rs 1050 crore between RCOM and Canara Bank is also under the ED scanner apart from some undisclosed foreign bank accounts and assets the sources saidReliance Mutual Fund is also stated to have invested Rs 2850 crore in AT1 bonds and a quid pro quo is suspected here by the agencyAdditional Tier 1 AT1 are perpetual bonds issued by banks to increase their capital base and they are riskier than traditional bonds having higher interest rateswith IANS and PTI inputs