After State Bank of India, Bank of India has classified the loan account of Reliance Communications as fraudulent and named its former director Anil Ambani, citing alleged fund diversion in 2016, according to a regulatory filing. Ambani hit back at Bank of India, calling its action selective and contrary to due process. Ambani said he was being unfairly singled out.
“Astonishingly, after an inordinate lapse of more than 10 years, select lenders have now chosen to initiate proceedings in a staggered and selective manner,” a spokesperson for Ambani said.
Allegations and the Bank’s action
Bank of India granted a Rs 700-crore loan in August 2016 to Reliance Communications for its capital and operational expenditure and repayment of existing liabilities. Half of the sanctioned amount disbursed in October 2016 was invested in a fixed deposit, which was not permitted as per the sanction letter, according to the bank’s letter that RCom disclosed in the stock exchange filing. RCom said it had on August 22 received a letter from Bank of India dated August 8 stating the bank’s decision “to classify the loan accounts of the company, Anil Dhirajlal Ambani (promoter and erstwhile director of the company), and Manjari Ashok Kacker (erstwhile director of the company), as fraud”.
Previously, State Bank of India (SBI) had done the same in June this year, alleging misappropriation of bank funds by entering into transactions that violated the terms of the loans.
Following a complaint by SBI, the Central Bureau of Investigation (CBI) on Saturday searched premises linked to Reliance Communications and Ambani’s residence.
Anil Ambani’s statement
In a statement, the spokesperson for Ambani said, “Bank of India had issued show-cause notices to 13 directors and key managerial personnel of RCom but later withdrew the same against all others.” “It selectively continued the proceedings against Ambani without following the principles of natural justice.”
The statement stressed that Ambani had only served as a non-executive director on RCom’s board, resigning in 2019, and “had no role whatsoever in the day-to-day operations or decision-making of the company.”
The company further alleged that the bank failed to share necessary documents and deprived him of a personal hearing before arriving at its decision. “These actions are contrary to the RBI regulations issued in July 2024, as well as to established law and judicial precedents,” the spokesperson said.
RCom remains under insolvency proceedings, supervised by a committee of creditors led by State Bank of India and overseen by a resolution professional. The matter is sub-judice before the National Company Law Tribunal and the Supreme Court.
“Ambani categorically denies all allegations and charges and will pursue legal remedies,” the statement added.
With agency inputs