Mukesh Ambani led Reliance Industries Ltd. (RIL) has clarified its position on a news item about the company diverting corporate social responsibility (CSR) funds for other activities.
Certain companies such as those with a turnover of more than ₹ 1,000 crore or with a profit of more than ₹ 5 crore a year are mandated with undertaking CSR activities by the Companies Act 2013 for the betterment of the community and the environment. Businesses can invest a part of their profits for educational and social programs, poverty upliftment, gender equality, hunger reduction etc.
On June 19th DNA had reported that the Ministry of Corporate Affairs (MCA) had served a notice to RIL for diverting funds to the tune of ₹ 1,740 crore earmarked for mandatory CSR activities. A complaint was made by a whistle blower to the Department of Economic Affairs of the Finance Ministry.
Three projects of RIL have come under the scanner since then; The Reliance Foundation Hospital & Research Centre in Mumbai, Reliance Jio University in Navi Mumbai and Dhirubhai Ambani Hospital in Panvel. The ministry has asked RIL to furnish details of funding, operations and revenues for each of the three projects.
Reliance clarified via a statement “The Company is proud to be the largest corporate contributor to CSR in India. The company is in compliance with CSR requirements under the Companies Act 2013 and detailed disclosure is made in the Annual Report of the company each year, duly certified by the company’s Statutory Auditors”.
On another note, Reliance Industries said it has signed a pact with overseas lenders to avail long term loans of $ 1.85 Billion (roughly ₹ 13,000 crore) to finance capital expenditure. The fundraising comes amid reports of the company planning to infuse as much as ₹ 20,000 crore into its telecom unit Jio ahead of a potential entry into 5G telecom services in the future.
This fundraising also comes amid a report published by Bloomberg a fortnight ago stating that Reliance Industries now contributes the most to debt of the Nifty 50 companies contributing 16.7% of these listed firms. Total debt of the oil to telecom conglomerate rose to ₹ 2,72,000 crore or ₹ 2.72 Trillion for the year ended March 2019 due to higher capital expenditure.