Industrialist Anil Ambani Appears Before ED in Bank Loan Fraud Case

Industrialist Anil Ambani appeared before the Enforcement Directorate (ED) in New Delhi on Tuesday for questioning in connection with a money laundering investigation related to an alleged Rs 3,000 crore bank loan fraud involving companies of the Reliance Anil Dhirubhai Ambani Group. This is part of the ED’s probe under the Prevention of Money Laundering Act (PMLA), and Ambani’s statement was recorded at the ED headquarters.

The investigation follows extensive searches conducted by the ED last month at over 35 locations linked to Anil Ambani, which concluded on July 27. The agency also issued a Look-out Circular (LOC) to prevent Ambani from traveling abroad during the ongoing investigation.

The core of the probe centers on allegations that loans worth approximately Rs 3,000 crore, disbursed by Yes Bank to the Ambani group’s companies between 2017 and 2019, were illegally diverted. The ED is also examining if there was a quid pro quo arrangement, specifically investigating whether bribes were paid to bank officials, including Yes Bank promoters, in connection with these loans.

Reliance Power, a company within the group, issued a statement clarifying that the ED’s actions have concluded across all locations. The company and its officials have fully cooperated with the authorities and will continue to do so. They emphasized that the ED’s probe has not impacted the company’s business operations, financial performance, shareholders, employees, or other stakeholders. The statement also noted that some of the allegations pertain to transactions involving Reliance Communications Limited (RCOM) or Reliance Home Finance Limited (RHFL), which are over a decade old.

During the investigation, the ED uncovered several alleged irregularities related to Yes Bank’s loan approvals to the group’s companies. These include backdated credit approval memorandums and investment proposals made without proper due diligence or credit analysis, which are violations of the bank’s credit policies. Such discrepancies suggest potential procedural lapses or deliberate manipulation within the loan approval process.

Additionally, the ED has alleged that Reliance Mutual Fund invested around Rs 2,850 crore in AT1 bonds issued by Yes Bank. This investment is being scrutinized as part of the suspected quid pro quo arrangement, where financial transactions may have been used to compensate or secure favors related to the loans.

The investigation highlights concerns about governance, transparency, and compliance within financial dealings between Yes Bank and the Reliance group. It also underscores broader issues within the banking sector related to the sanctioning and management of large corporate loans.

The Enforcement Directorate’s probe remains active, with ongoing efforts to gather evidence and establish the extent of wrongdoing, if any, by the parties involved. The case has drawn significant attention due to the scale of the alleged fraud and its implications for corporate governance and banking regulations in India.

As the investigation progresses, further statements and actions by both the ED and the companies involved are anticipated. This case also reflects increased scrutiny on financial institutions and corporate entities to uphold ethical standards and legal compliance in their operations, especially concerning large loan disbursements and investments.