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The regulatory scrutiny has increased around Anil Ambani’s Reliance Group. Following continuous investigations by the Enforcement Directorate (ED), the Central Bureau of Investigation (CBI), and the Securities and Exchange Board of India (SEBI), the Ministry of Corporate Affairs (MCA) has started a new investigation into possible fund misdirection among various group companies, including Reliance Infrastructure, Reliance Communications, Reliance Commercial Finance, and CLE Pvt Ltd. Sources indicate that the case is now with the Serious Fraud Investigation Office (SFIO), after preliminary findings from the MCA showed significant fund misappropriation and serious breaches of the Companies Act. The SFIO is likely to look into the movement of money between group companies and determine accountability at the higher management level. Actions will be taken based on the investigation results.
This development occurs as the ED has intensified its enforcement against the financially troubled conglomerate. Earlier this week, the agency seized assets worth nearly Rs 7,500 crore from Reliance Group companies. ED representatives mentioned that the seized properties include 30 assets from Reliance Infrastructure, along with properties associated with Adhar Property Consultancy, Mohanbir Hi-tech Build, Gamesa Investment Management, Vihaan43 Realty, and Campion Properties. These seizures are linked to what authorities refer to as a multi-crore bank fraud case connected to Reliance Infrastructure. The ED’s case focuses on loans taken out by Reliance Communications (RCOM) and its associated firms between 2010 and 2012. According to the agency, the unpaid dues amount to Rs 40,185 crore, with five banks marking the loan accounts as fraudulent. Investigators claim that funds were misappropriated across group companies, redirected to related parties, and even used to settle previous loans against the terms of the agreements. The ED has accused that money collected for business use was instead utilized for what it describes as “evergreening” existing debts.
“Between 2010 and 2012, RCOM and its group businesses borrowed thousands of crores from Indian banks, with Rs 19,694 crore still owed. These assets have become non-performing, and five banks have categorized RCOM’s loan accounts as fraudulent,” the agency stated, highlighting that multiple entities of the Reliance Anil Ambani Group were involved in the misallocation of funds. The ED estimates that at least Rs 13,600 crore was redirected through complicated transactions, and claims that some funds were moved abroad. Companies like Reliance Home Finance, Reliance Commercial Finance, Reliance Infrastructure, and Reliance Power are part of the inquiry. Earlier, the CBI and ED conducted searches at the home and offices of Anil Ambani and senior officials within the group in August. A senior finance member associated with the group was later arrested.
Reliance Group companies have encountered several insolvency actions in recent years as financial pressures increased. RCOM is currently going through insolvency proceedings, while many other group companies are facing lawsuits and recovery efforts from creditors. The MCA’s choice to escalate the issue to the SFIO indicates a more in-depth investigation into the group’s financial activities and a renewed emphasis on accountability. Meanwhile, the ED’s asset seizures and the fraud designation by creditors create significant legal and financial difficulties.
