The Central Bureau of Investigation (CBI) on Tuesday filed its first chargesheet in the alleged Rs 4,097-crore Reliance Commercial Finance Limited (RCFL) bank fraud case, accusing five former senior executives of conspiring to divert loan funds and cause massive losses to a consortium of 13 public sector banks. The chargesheet, filed before a special court in Mumbai, also names Reliance Infrastructure Ltd and Reliance Home Finance Limited (RHFL) as accused.

Rs 4,097 crore loss to 13 PSU banks

According to the CBI, the case stems from complaints lodged by the Bank of Maharashtra and other public sector banks that were part of the lending consortium. The agency alleged that RCFL diverted borrowed funds through intermediary and conduit entities to various Reliance ADA Group companies, violating the terms and conditions under which the loans had been sanctioned.

The alleged diversion resulted in a wrongful loss of Rs 4,097 crore to 13 public sector banks while providing corresponding gains to the accused individuals and related entities.

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Five former executives chargesheeted

The CBI has chargesheeted the following former RCFL executives:

Devang Pravin Mody – Director and CEO
Ravindra Somayajula Rao – Director
Dhananjay Bhagwanprasad Tiwari – Director
Rajesh Krishnamoorthy – Executive Risk Officer
Lav Chaturvedi – Chief Risk Officer

According to the agency, they have been booked on charges of criminal conspiracy and cheating, alleging they knowingly facilitated transactions that caused substantial financial losses to public sector lenders.

Alleged diversion of borrowed funds

In a statement, the CBI said its investigation found that funds borrowed by RCFL were routed through intermediary entities before being transferred to companies within the Reliance ADA Group. The agency alleged that these transactions violated lending conditions and amounted to diversion of bank funds.

Officials said the investigation is continuing to determine the role of other individuals, corporate entities and public servants who may have been involved in the alleged fraud.

Investigation still underway

The CBI has kept the probe open and indicated that supplementary chargesheets are likely as the investigation progresses. The agency had earlier arrested former Vice Chairman of Reliance Capital Ltd Amitabh Jhunjhunwala, former CEO of RCFL Devang Pravin Mody and former Chief Financial Officer of Reliance Capital Ltd Amit Bapna.

According to the CBI, Jhunjhunwala and Mody are currently in judicial custody, while Bapna remains in CBI custody. Officials said investigations into the roles of Jhunjhunwala and Bapna are still ongoing.

Multiple cases against Reliance group firms

The RCFL case is part of an investigation into alleged financial irregularities involving companies of the Reliance ADA Group. The CBI has registered seven FIRs against Reliance Communications Ltd (RCom), Reliance Home Finance Ltd (RHFL), Reliance Commercial Finance Ltd (RCFL) and Reliance Telecom Ltd (RTL) based on complaints from various public sector banks and the Life Insurance Corporation of India (LIC).