RCom Loan Case: Bank of India tags Anil Ambani's RCom loan account as Fraudulent

New Delhi: After SBI, the Bank of India has also declared Reliance Communications’ loan account as fraud. The bank has named former director Anil Ambani, accusing him of diverting funds in 2016, according to a regulatory filing.

File photo: Reliance Communications group chairman Mr. Anil Ambani

Bank of India had given RCom a ₹700 crore loan in August 2016 for expenses and repayment of dues. But half the amount released in October 2016 was parked in a fixed deposit, which was not allowed under the loan terms, the bank said.

RCom said it received a letter on August 22, in which the bank informed its decision to classify the accounts of the company, Anil Ambani, and former director Manjari Ashok Kacker as “fraud.”

Earlier in June, SBI had also flagged RCom’s loan as fraud, accusing it of misusing funds and breaking loan conditions.

The CBI on Saturday searched Reliance Communications offices and Anil Ambani’s residence after a complaint from SBI.

The agency registered the case following SBI’s claim of a ₹2,929 crore loss, alleging misuse of funds by RCom and Ambani, the younger brother of Mukesh Ambani.

Anil Ambani’s spokesperson denied all charges, saying he will defend himself. The statement added that the case relates to events over 10 years old, when Ambani was only a non-executive director with no role in daily operations.

The spokesperson also noted that SBI had already dropped cases against five other non-executive directors but has “selectively singled out” Ambani.

In its latest filing, RCom said its subsidiary Reliance Telecom also received a letter from Bank of India, declaring its loans and those of former director Grace Thomas as “fraud.”

As per banking rules, once a loan is marked fraudulent, it must be reported to enforcement agencies for criminal action, and the borrower cannot take new bank loans for five years.

Bank of India said RCom turned into an NPA in June 2017, with dues of ₹724.78 crore, and despite repeated reminders, repayments were not made.

RCom disclosed in April that its total debt stood at ₹40,400 crore as of March. The company is already under insolvency proceedings, managed by a Committee of Creditors led by SBI and monitored by a Resolution Professional.