India’s financial crime agency probes Anil Ambani’s Reliance Group

Several group firms of Anil Ambani have gone into bankruptcy since 2017. (EPA Images pic)MUMBAI: India’s financial crime-fighting agency searched 35 locations linked to Reliance Anil Ambani Group as part of an investigation into alleged money laundering and siphoning of public funds, a government source said today.The Enforcement Directorate alleges the group orchestrated a “well-planned” scheme to siphon off 30 billion rupees (US$350 million) in loans from YES Bank to many shell companies between 2017 and 2019, the source said on condition of anonymity, as he was not authorised to speak to the media.Anil Ambani’s Reliance group entities are accused of paying bribes to YES Bank officials before loans were disbursed, the source said, adding that loan approvals violated the bank’s processes.The probe also found gross violations in YES Bank’s loan approval process, such as lending to companies with weak financials, backdating credit memos, “evergreening” loans – issuing fresh loans to avoid labelling assets as nonperforming – and misrepresenting financials.Representatives for the Reliance group and YES Bank did not respond to requests for comment.Several group firms of Anil Ambani, the younger brother of billionaire Mukesh Ambani, have gone into bankruptcy since 2017.YES Bank, from which Anil Ambani group firms had borrowed heavily, was declared insolvent in 2020 and rescued by a group of Indian lenders in a plan approved by the central bank.Japan’s Sumitomo Mitsui Banking Corp is seeking a 20% stake in a deal that has yet to get regulatory approval.The bank’s former promoter, Rana Kapoor, was charged with bank fraud by the financial crime agency in 2020 and later arrested.He pleaded not guilty and was granted bail in 2024 by a special court in India’s financial capital of Mumbai, according to local media reports.Regulatory actions“The financial crime agency can now seize or attach assets of Anil Ambani entities as the ‘proceeds of crime’,” said Debopriyo Moulik, a lawyer at India’s Supreme Court.“However, the group companies can challenge the agency’s findings in court,” he said.Anil Ambani’s group entities have been subject to several regulatory actions in recent years.In August 2024, the markets regulator SEBI barred Anil Ambani and 24 others from securities markets for five years, citing fund diversion from Reliance Home Finance.The markets regulator has shared findings of its investigation on Reliance Home Finance with the financial crime agency, which is likely to probe a sharp rise in corporate loans granted by the finance company, the source said.Shares of Reliance Infrastructure and Reliance Power fell as much as 5% today after the news of the latest probe circulated.The companies issued similar statements to Indian stock exchanges saying the agency’s actions “have absolutely no impact on the business operations, financial performance, shareholders, employees, or any other stakeholders” of the two companies.“The media reports appear to pertain to allegations concerning transactions of Reliance Communications Limited (RCOM) or Reliance Home Finance Limited (RHFL) which are over 10 years old,” the statements said.Reliance Group’s businesses range from defence to power and infrastructure, although Ambani himself is not on the boards of any listed entities, following orders passed by the market regulator, which Ambani has challenged.

MatchPoint Times

India’s financial crime agency probes Anil Ambani’s Reliance Group

The Enforcement Directorate can now seize or attach assets of Anil Ambani entities as the ‘proceeds of crime’, says a Supreme Court lawyer.

Disgraced US ex-congressman Santos reports to prison

Pakistan says it’s close to US trade deal, Washington gives no timeline