The State Bank of India has declared the loan amount to Reliance Communications as fraudulent and decided to report the company and Anil Ambani, its director at that time, to the Reserve Bank of India. In its defence, the Anil Ambani Group company says that it is protected from any offence committed prior to the commencement of the Insolvency Resolution Process.
Reliance Communication: What the SBI report says
The State Bank of India alleged that Reliance Communications’ management and promoters carried out various transactions through the manipulation of the books of account to misappropriate funds.
In its report, the State Bank said that Reliance Communications used a single amount to mark off many entries. The bank stated that in its response, the company’s management gave contradictory statements on these transactions.
“These transactions do not appear genuine or conducted in the normal course of business. The transaction appears to be an attempt at diversion of funds by manipulation of books of accounts through fictitious accounts/fictitious entries.” SBI claimed in its report.
Reliance Communication responds
In an exchange filing, Reliance Communications said that the company is going through bankruptcy, and thus it is protected from any suits or proceedings against the company. The company said that it is protected against any liability for an offence committed prior to the commencement of the Corporate Insolvency Resolution Process.
Previously, Reliance Communications received Show Cause Notices from the State Bank issued on December 12, 2023, March 5, 2024, and September 26, 2024, and stated their case in their responses. However, SBI said that the company did not provide sufficient reasons for the satisfaction of the bank.
Reliance Communications said that the ‘fraud’ classification will not have any impact on the company. Furthermore, the company said that it is seeking legal advice on the way forward in respect to the latest classification.