Anil Ambani's difficulty may increase, SBI declared RCom fraud account

Anil Ambani

State Bank of India (SBI) has declared the Loan Account of Reliance Communications (RCom) as fraud. The bank alleges that the company incorrectly transferred the approved loan amount to other companies, misusing inter-company transactions and sales invoices. The bank will now report to the Reserve Bank of India (RBI) against the company and its former promoter Anil Ambani. This information is given in a letter filed by SBI in the stock exchange.

Answer from Anil Ambani

After this revelation, Delhi's Aggarwal Law Associates (who is representing Anil Ambani) has expressed surprise at the decision and described it as a unilateral order. The firm says that on 21 October 2024, he wrote a letter to the bank, stating that the show cause notice (SCN) issued on 20 December 2023 of SBI is no longer valid as the new instructions issued by RBI on 15 July 2024 have canceled all the old guidelines. In such a situation, the bank should have withdrawn the SCN.

The legal firm says that Anil Ambani was convinced by SBI's silence for almost a year that the bank had accepted his side and will not take any tough step on it now.

Complaint of FIR and personal hearing

Aggarwal Associates also said that the forensic audit report (FAR) given by SBI was incomplete and complete documents were not provided, so that Ambani could not answer properly. Also, he was not given a chance for personal hearing in this case.

SBI's side

SBI said in its notice that in March 2023, the Supreme Court had ruled that it is necessary to give a promoter a chance to hear before declaring fraud. After this, the bank removed the earlier fraud tag and sent new notices to the company and its promoters on 20 December 2023, March 2024 and September 2024.

The bank also received an answer from the resolution professional in January 2024, stating that SBI is free to take action against old directors or employees based on fraud.

It has happened before

Prior to SBI, Canara Bank had also declared RCom a fraud, and he also gave the same reason to send the loan amount to connected parties and inter-company transactions. RCom and its subsidiary companies had taken loans worth Rs 31,580 crore from banks.