ED seizes ₹1,452-crore assets in Reliance Communications loan fraud probe
India's Enforcement Directorate has provisionally attached properties worth ₹1,452 crore in an ongoing money-laundering investigation involving Reliance Communications Ltd (RCom), the telecommunications company currently undergoing bankruptcy proceedings. The asset freeze represents the latest development in a complex financial fraud case that has already seen over ₹7,545 crore in properties seized across multiple entities within the former Reliance Group.
Background and Context
The investigation traces back to loans obtained by RCom and affiliated companies between 2010 and 2012, with outstanding amounts now totaling ₹40,185 crore. Nine banks have classified these loan accounts as fraudulent, prompting action from India's primary financial crime-fighting agency. The case emerged from a Central Bureau of Investigation first information report filed under various sections of the Indian Penal Code and Prevention of Corruption Act, targeting RCom and certain individuals connected to the company.
Key Figures and Entities
Reliance Communications, founded as part of Anil Dhirubhai Ambani's Reliance Group, has been operating under insolvency proceedings for over six years. According to court filings, the company is now managed by a Resolution Professional under the supervision of the National Company Law Tribunal and a Committee of Creditors led by the State Bank of India. A spokesperson for the Reliance Group emphasized that Anil D. Ambani resigned from RCom in 2019 and has no involvement with the company's current operations, which are controlled by creditor-appointed professionals.
Legal and Financial Mechanisms
Under the provisions of the Prevention of Money Laundering Act (PMLA), 2002, the ED has frozen multiple buildings in Dhirubhai Ambani Knowledge City and Millennium Business Park in Navi Mumbai, along with land and buildings in Pune, Chennai, and Bhubaneshwar. Investigators allege that RCom and its group companies engaged in sophisticated financial maneuvers, including diverting over ₹13,600 crore for loan evergreening, transferring more than ₹12,600 crore to connected parties, and investing over ₹1,800 crore in financial instruments that were subsequently liquidated and rerouted within the group.
International Implications and Policy Response
The total attachment in these interconnected cases now stands at ₹8,997 crore, highlighting significant challenges in India's banking and corporate governance framework. The case demonstrates how large corporate borrowers can allegedly manipulate multiple banking relationships to perpetuate fraud across the financial system. The ED's ongoing action reflects increased regulatory scrutiny of financial crimes in India, though the complex corporate restructuring through insolvency proceedings presents additional challenges for asset recovery and prosecution.
Sources
This report draws on official statements from India's Enforcement Directorate, court filings from the National Company Law Tribunal, and public records regarding corporate insolvency proceedings. The investigation references documentation from the Central Bureau of Investigation and banking regulatory authorities concerning loan classifications and fraud declarations.
