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Three Anil Ambani companies have reportedly been accused of fraud by banks⁠ — the amount at stake is nearly ten times more than what Mallya owed

Dec 31, 2020, 12:14 IST
Business Insider India
Anil AmbaniBCCL
  • The accounts of three Anil Ambani-led Reliance Group entities have reportedly been flagged as fraudulent by three banks, including India’s largest lender, the State Bank of India (SBI).
  • Reliance Communications, Reliance Infratel, and Reliance Telecom owe lenders ₹86,188 crore.
  • This is ten times more than the debt garnered by former billionaires Vijay Mallya and Nirav Modi.

India’s infamous fallen billionaire, Anil Ambani, may have claimed that his ‘net worth is zero’ but Indian banks aren’t buying it.

In the midst of Reliance Communications’ bankruptcy resolution process, three Indian banks — the State Bank of India (SBI), Union Bank of India (UBI) and the Indian Overseas Bank (IOB) — are classifying the company’s accounts and the accounts of its units as fraudulent.

Sources told the Economic Times that the three banks, which includes India’s largest lender, are looking to launch a deeper probe into the transactions from the account of three Anil Ambani-led Reliance Group entities — Reliance Communications, Reliance Infratel and Reliance Telecom.

However, the Delhi High Court has 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.

SBI and the Reliance Anil Dhirubhai Ambani Group declined to comment on the issue at the time of writing this article.

"It is being falsely and mischievously stated in a section of social media that RCOM Group of companies owe Rs. 86,188 crore to Indian banks and financial institutions. have put out this statement," Reliance Communications told IANS two days later on December 30.

The company asserts that as per figures certified by the Resolution Professional appointed by the lenders, the Reliance Communications' group owed ₹26,000 crore to Indian banks and financial institutions as on the date of filing before the NCLT. The Resolution Plans unanimously agreed by the lenders are at various stages of approval before the NCLT, and upon implementation thereof, the lenders are likely to recover at least 70% of their dues, with potential subsequent upside.

Anil Ambani (R) with brother Mukesh Ambani (L)BCCL

Reliance Communications’ owes nearly ten times more money than Vijay Mallya and Nirav Modi
The accusation of fraud puts Reliance Communications’ resolution plan at risk. According to the company’s official website, it owes ₹49,193 crore in dues.

In addition to that, Reliance Telecom owes ₹24,306.27 crore and Reliance Infratel owes ₹12,687.65 crore.

Cumulatively, this adds up to ₹86,188 crore — while still excluding the ₹28,837 that’s owed in spectrum dues.

Reliance Communications₹ 49,193 crore
Reliance Telecom₹ 24,306.27 crore
Reliance Infratel₹ 12,687.65 crore
TOTAL₹ 86,188 crore

This is ten times more than what another fallen billionaire, Vijay Mallya, owed Indian banks, with debt amounting to ₹9,000 crore. Compared to Nirav Modi, who owes at ₹7,409.07 crore, Reliance Communications’ debt is even more than a ten-fold hike.

Vijay MallyaBCCL

Bankruptcy resolution hangs in the balance
These allegations come nearly a year after a forensic audit unearthed questionable transactions worth ₹5,500 crore in the three Anil Ambani-led Reliance Group entities.

At the time, the probe 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 reclassification of Reliance Communication and affiliated companies’ accounts 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.

This opens up the path for Anil Ambani’s brother, Mukesh Ambani, to pick the company’s tower and fibre assets for his own telecom enterprise, Reliance Jio. The total consideration is pegged at around ₹20,000 to ₹23,000 crore to be paid over the next seven years.

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

Update: Article was updated on December 30 to reflect Reliance Communications' statement to IANS.

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