India’s financial crime agency probes Anil Ambani’s Reliance Group, source says
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India’s financial crime agency probes Anil Ambani’s Reliance Group, source says
India’s financial crime-fighting agency searches 35 locations linked to Reliance Anil Ambani Group. Agency alleges group orchestrated a “well-planned” scheme to siphon off 30 billion rupees ($350 million) in loans from YES Bank.YES Bank was declared insolvent in 2020 and rescued by a group of Indian lenders in a plan approved by the central bank. The bank’s former promoter, Rana Kapoor, was charged with bank fraud by the financial crime agency in 2020. He pleaded not guilty and was granted bail in 2024 by a special court in India’s financial capital of Mumbai, according to local media reports. The group companies can challenge the agency’s findings in court, a lawyer at India’s Supreme Court said. The companies issued similar statements to Indian stock exchanges saying agency’s actions “have absolutely no impact on the business operations, financial performance, shareholders, employees”
Summary
Companies Agency alleges Anil Ambani firms paid bribes, routed funds via shell companies
YES Bank loan approvals for Anil Ambani’s firms violated norms, backdated credit memos, source says
Anil Ambani firms’ shares fall as much as 5% after probe news
July 24 (Reuters) – India’s financial crime-fighting agency searched 35 locations linked to Reliance Anil Ambani Group as part of an investigation into alleged money laundering and siphoning of public funds, a government source said on Thursday.
The Enforcement Directorate alleges the group orchestrated a “well-planned” scheme to siphon off 30 billion rupees ($350 million) in loans from YES Bank (YESB.NS) , opens new tab to many shell companies between 2017 and 2019, the source said on condition of anonymity, as he was not authorised to speak to the media.
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Anil Ambani’s Reliance group entities are accused of paying bribes to YES Bank officials before loans were disbursed, the source said, adding that loan approvals violated the bank’s processes.
The probe also found gross violations in YES Bank’s loan approval process, such as lending to companies with weak financials, backdating credit memos, “evergreening” loans – issuing fresh loans to avoid labelling assets as nonperforming – and misrepresenting financials.
Representatives for Reliance group and YES Bank did not respond to requests for comment.
Several group firms of Anil Ambani, the younger brother of billionaire Mukesh Ambani, have gone into bankruptcy since 2017.
YES Bank, from which Anil Ambani group firms had borrowed heavily, was declared insolvent in 2020 and rescued by a group of Indian lenders in a plan approved by the central bank. Japan’s Sumitomo Mitsui Banking Corp is seeking a 20% stake in a deal that has yet to get regulatory approval.
The bank’s former promoter, Rana Kapoor, was charged with bank fraud by the financial crime agency in 2020 and later arrested. He pleaded not guilty and was granted bail in 2024 by a special court in India’s financial capital of Mumbai, according to local media reports.
REGULATORY ACTIONS
The financial crime agency can now seize or attach assets of Anil Ambani entities as the “proceeds of crime”, said Debopriyo Moulik, a lawyer at India’s Supreme Court. However, the group companies can challenge the agency’s findings in court, he said.
Anil Ambani’s group entities have been subject to several regulatory actions in recent years. In August 2024, the markets regulator SEBI barred Anil Ambani and 24 others from securities markets for five years, citing fund diversion from Reliance Home Finance.
The markets regulator has shared findings of its investigation on Reliance Home Finance with the financial crime agency, which is likely to probe a sharp rise in corporate loans granted by the finance company, the source said.
The companies issued similar statements to Indian stock exchanges saying the agency’s actions “have absolutely no impact on the business operations, financial performance, shareholders, employees, or any other stakeholders” of the two companies.
“The media reports appear to pertain to allegations concerning transactions of Reliance Communications Limited (RCOM) or Reliance Home Finance Limited (RHFL) which are over 10 years old,” the statements said.
Reliance Group’s businesses range from defence to power and infrastructure, although Ambani himself is not on the boards of any listed entities, following orders passed by the market regulator, which Ambani has challenged.
($1 = 86.3300 Indian rupees)
Reporting by Nikunj Ohri in New Delhi; Writing by Shubham Batra; Editing by William Mallard
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India’s financial crime agency probes Anil Ambani’s Reliance Group, source says
India’s financial crime-fighting agency searches 35 locations linked to Reliance Anil Ambani Group. Agency alleges group orchestrated a “well-planned” scheme to siphon off 30 billion rupees ($350 million) in loans from YES Bank.YES Bank was declared insolvent in 2020 and rescued by a group of Indian lenders in a plan approved by the central bank. The bank’s former promoter, Rana Kapoor, was charged with bank fraud by the financial crime agency in 2020. He pleaded not guilty and was granted bail in 2024 by a special court in India’s financial capital of Mumbai, according to local media reports. The group companies can challenge the agency’s findings in court, a lawyer at India’s Supreme Court said. The companies issued similar statements to Indian stock exchanges saying agency’s actions “have absolutely no impact on the business operations, financial performance, shareholders, employees”
Summary
Companies Agency alleges Anil Ambani firms paid bribes, routed funds via shell companies
YES Bank loan approvals for Anil Ambani’s firms violated norms, backdated credit memos, source says
Anil Ambani firms’ shares fall as much as 5% after probe news
July 24 (Reuters) – India’s financial crime-fighting agency searched 35 locations linked to Reliance Anil Ambani Group as part of an investigation into alleged money laundering and siphoning of public funds, a government source said on Thursday.
The Enforcement Directorate alleges the group orchestrated a “well-planned” scheme to siphon off 30 billion rupees ($350 million) in loans from YES Bank (YESB.NS) , opens new tab to many shell companies between 2017 and 2019, the source said on condition of anonymity, as he was not authorised to speak to the media.
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Anil Ambani’s Reliance group entities are accused of paying bribes to YES Bank officials before loans were disbursed, the source said, adding that loan approvals violated the bank’s processes.
The probe also found gross violations in YES Bank’s loan approval process, such as lending to companies with weak financials, backdating credit memos, “evergreening” loans – issuing fresh loans to avoid labelling assets as nonperforming – and misrepresenting financials.
Representatives for Reliance group and YES Bank did not respond to requests for comment.
Several group firms of Anil Ambani, the younger brother of billionaire Mukesh Ambani, have gone into bankruptcy since 2017.
YES Bank, from which Anil Ambani group firms had borrowed heavily, was declared insolvent in 2020 and rescued by a group of Indian lenders in a plan approved by the central bank. Japan’s Sumitomo Mitsui Banking Corp is seeking a 20% stake in a deal that has yet to get regulatory approval.
The bank’s former promoter, Rana Kapoor, was charged with bank fraud by the financial crime agency in 2020 and later arrested. He pleaded not guilty and was granted bail in 2024 by a special court in India’s financial capital of Mumbai, according to local media reports.
REGULATORY ACTIONS
The financial crime agency can now seize or attach assets of Anil Ambani entities as the “proceeds of crime”, said Debopriyo Moulik, a lawyer at India’s Supreme Court. However, the group companies can challenge the agency’s findings in court, he said.
Anil Ambani’s group entities have been subject to several regulatory actions in recent years. In August 2024, the markets regulator SEBI barred Anil Ambani and 24 others from securities markets for five years, citing fund diversion from Reliance Home Finance.
The markets regulator has shared findings of its investigation on Reliance Home Finance with the financial crime agency, which is likely to probe a sharp rise in corporate loans granted by the finance company, the source said.
The companies issued similar statements to Indian stock exchanges saying the agency’s actions “have absolutely no impact on the business operations, financial performance, shareholders, employees, or any other stakeholders” of the two companies.
“The media reports appear to pertain to allegations concerning transactions of Reliance Communications Limited (RCOM) or Reliance Home Finance Limited (RHFL) which are over 10 years old,” the statements said.
Reliance Group’s businesses range from defence to power and infrastructure, although Ambani himself is not on the boards of any listed entities, following orders passed by the market regulator, which Ambani has challenged.
($1 = 86.3300 Indian rupees)
Reporting by Nikunj Ohri in New Delhi; Writing by Shubham Batra; Editing by William Mallard
Our Standards: The Thomson Reuters Trust Principles. , opens new tab
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