Three Anil Ambani Companies Flagged Fraudulent By Banks, Rs 86,188 Crore At Stake: Report

“Sure, the balloon has burst. But who was pumping gas in the balloon? Indian bankers are as responsible as Mr Ambani,” says HW News’ Business Editor Akhilesh Bhargava over the developments.

According to the report by the Business Insider, problems for fallen billionaire Anil Ambani do not seem to be ending soon as in the middle of Reliance Communications’ bankruptcy resolution process, three Indian banks are classifying the company’s accounts and the accounts of its units as fraudulent.

Anil Ambani, who had told a UK court that his “net worth was zero” and he was bankrupt, now finds himself under the scanner of the State Bank of India (SBI), Union Bank of India (UBI) and the Indian Overseas Bank (IOB), who are not willing to buy his story.

According to the sources quoted by Economic Times, the three Anil Ambani-led Reliance Group entities — Reliance Communications, Reliance Infratel and Reliance Telecom, are going to be subjected to a deeper probe into the transactions from their accounts by the three banks, including India’s largest lender.

The Delhi High Court has, however, directed Union Bank of India and Indian Overseas Bank to maintain the status quo in a matter pertaining to the classification of accounts as fraudulent until the next hearing on January 13.

Once accused of fraud, the prospects of Reliance Communication’s resolution process become grim. The company owes Rs 49,193 crore in dues according to its website. Reliance Telecom and Reliance Infratel, in addition to that, owe Rs 24,306.27 crore and Rs 12,687.65 crore respectively. The total amounts to whopping Rs 86,188 crore, that too excluding the Rs 28,837 that’s owed in spectrum dues. The amount is ten times more than what fugitive billionaire Vijay Mallya owed Indian banks, with debt amounting to ₹9,000 crore. The amount owed by Nirav Modi is Rs 7,409.07 crore. Reliance Communications debt is ten times more than Modi’s.

The recent developments come a year after a forensic audit unearthed questionable transactions worth ₹5,500 crore in the three Anil Ambani-led Reliance Group companies. The probe at that time had found three suspicious large entries buried between hundreds of thousands of other transactions between May 2017 and March 2018, which indicated fund diversion.

However, the classification of Ambani’s companies as fraudulent comes at a time when the bankruptcy resolution was finally moving along. The National Company Law Tribunal (NCLT) gave its approval to the resolution plan on December 5 after at least 11 months of negotiations.

It will open new doors for Anil Ambani’s brother, Mukesh Ambani, to pick the company’s tower and fibre assets for his own telecom enterprise, Reliance Jio. To be paid over the next seven years, the total consideration is pegged at around ₹20,000 to ₹23,000 crore.

Reliance Communications and Reliance Telecom Infrastructure will go to the UV Asset Reconstruction Company.

Talking about the recent developments in the case, HW News’ Business Editor Akhilesh Bhargava said: “Sure, the balloon has burst. But who was pumping gas in the balloon? Indian bankers are as responsible as Mr Ambani that things have come to this point. The situation of the company has been shaky for the last few years. At a time when Vodafone was struggling to stay afloat, RCom was being handed over loans. What was RCom doing right? The role of bankers is as dubious as the RCom’s in this matter.”

Discussing the prospects of RCom’s bankruptcy resolution process in the wake of the reclassification of accounts, Mr Bhargava said the National Company Law Tribunal (NCLT) will have to stay the process since the tribunal cannot admit the petition as per the Insolvency and Bankruptcy Code, 2016 (IBC).

Depending on what the High Court decides on the stay of reclassification of his accounts by two banks, the future of course for Mr Ambani’s fortune depends on January 13th hearing, Mr Bhargava said. The due process will be followed by filing an FIR against the fraud and Mr Ambani may face the music from investigating agencies.


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