Former RCFL CEO Devang Mody gets bail in ₹4,097-cr bank fraud case

Mody, who served as RCFL’s director and CEO from April 2017 till December 2018, was arrested by the CBI on June 22 this year

MUMBAI: A special CBI court last week granted bail to former director and chief executive officer (CEO) of Reliance Commercial Finance Ltd (RCFL) Devang Mody in a ₹4,097-crore bank fraud case, after noting that the allegations regarding his role were “generic in nature”, the investigation was complete and the charge-sheet had been filed.

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Special judge Nitin V Jiwane also noted in the order dated August 29 that several persons allegedly involved in approving the loans had not been arrested and that Mody’s further custodial interrogation was not required.

Mody, who served as RCFL’s director and CEO from April 2017 till December 2018, was arrested by the CBI on June 22 this year. He was among three Reliance Anil Dhirubhai Ambani (ADA) Group executives arrested in the case, along with former Reliance Capital vice-chairman Amitabh Jhunjhunwala and former Reliance Capital chief financial officer (CFO) Amit Bapna.

The CBI filed its first charge-sheet in the case on July 7, naming as accused five former senior RCFL executives alongside Reliance Infrastructure Ltd and Reliance Home Finance Ltd.

The CBI subsequently alleged that funds borrowed by RCFL were routed through intermediary and conduit entities to various Reliance Anil Dhirubhai Ambani (ADA) Group companies in violation of loan conditions, causing losses worth ₹4,097 crore to 13 public-sector banks, and corresponding wrongful gain to the accused and related entities.

While arresting Mody, the CBI had described him as a “key decision-maker” and alleged that he approved loans to intermediary and conduit companies despite being aware that such lending was contrary to RBI guidelines and conditions attached to public-sector bank borrowings. The agency had sought his custodial interrogation to unravel the alleged conspiracy and identify the ultimate beneficiaries.

However, while considering Mody’s bail plea, the court found no concrete prima facie material showing that he had participated in availing the loans or induced anyone to obtain them. The allegations against Mody were similar to those against other approving authorities, none of whom had been arrested, the court said. It further noted that the evidence against him was predominantly documentary and had already been seized, reducing the scope for tampering.

The court also noted a change in the charges invoked against Mody between the remand stage and the charge-sheet. Though the CBI had invoked a serious breach-of-trust charge while seeking Mody’s custody, the same was not included in the charge-sheet, which accused him of cheating and criminal conspiracy.

The court recorded that Mody had appeared before the CBI several times before his arrest, and there was no allegation that he had failed to cooperate. It also noted the Look Out Circular issued against him, which reduced the possibility of his fleeing the trial. Considering these circumstances, the judge held that the “discretion in granting the bail needs to be exercised in favour of the applicant”.