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ED attaches 40 properties worth ₹3,000 crore of Anil Ambani-led Reliance Group
The probe pertains to diversion and laundering of public funds raised by Reliance Home Finance Ltd and Reliance Commercial Finance Ltd.
The Enforcement Directorate (ED) has attached 40 properties worth ₹3,000 crore, including the Pali Hill residence of the Ambani family in Mumbai and the Reliance Centre in Delhi, in connection with its money laundering probe against the Anil Ambani-led Reliance Group, people familiar with the development said.
Other than the Bandra residence and Reliance Centre at Ranjit Singh Marg in Delhi, the agency has attached multiple assets across Delhi, Noida, Ghaziabad, Mumbai, Pune, Thane, Hyderabad, Chennai (including Kancheepuram) and East Godavari under the Prevention of Money Laundering Act (PMLA). These assets include office premises, residential units and land parcels, officials said, adding that aggregate value of attachments is ₹3,084 crore.
The company is yet to release a statement on the ED action.
The probe pertains to diversion and laundering of public funds raised by Reliance Home Finance Ltd (RHFL) and Reliance Commercial Finance Ltd (RCFL).
It is alleged that during 2017–2019, Yes Bank invested ₹2,965 crore in RHFL instruments and ₹2,045 crore in RCFL instruments and these turned into non-performing investments by December 2019, with ₹1,353.50 crore then outstanding for RHFL and ₹1,984 crore for RCFL, said an officer who didn’t want to be named.
“The ED investigation found that direct investment by the erstwhile Reliance Nippon Mutual Fund into Anil Ambani Group financial companies was not legally possible due to SEBI’s mutual fund conflict of interest framework. In violation of these guidelines, the money invested by general public in the mutual fund was routed indirectly through Yes Bank exposures, which ultimately landed with Anil Ambani Group companies,” the officer said.
The investigation, according to a second officer, shows funds were routed indirectly through Yes Bank’s exposures to RHFL and RCFL, while RHFL and RCFL extended loans to entities linked to the Reliance Anil Ambani Group.
“The fund-tracing by ED found diversion of funds on lending to group linked entities and ultimate siphoning off. Substantial portions of corporate loans (General Purpose Corporate Loans) ultimately landed in accounts of Reliance group companies. While extending these loans, serious control failures are found by ED. The loans to group linked companies were speed processed without core prudential checks. Many loans were processed on the same day as application, sanction and agreement, and in some cases, disbursal preceded sanction,” said the second officer.
ED has also found that the funds were advanced even before the application for loan, which can be possible only if the applicant time travelled and field investigation and personal discussions were waived; documents were left blank, overwritten and undated.
“Several borrowers had weak financials or negligible operations. Security creation was inadequate or unregistered, and security schedules were left blank, the end use did not match the sanction conditions. ED found these intentional and consistent control failures,” he added.
The agency officials said they have also intensified probe in Reliance Communications Ltd. (RCOM) and related companies loan fraud.
ED has found that these companies diverted over ₹13,600 crore used in evergreening loans, over ₹12,600 crore was diverted to connected parties and over ₹1,800 crore was invested in FDs/MFs etc, which was substantially liquidated for rerouting to group entities.
“Huge misuse of bill discounting for the purpose of funneling funds to connected parties has also been detected by ED. ED continues to trace proceeds of crime and secure attachments of property. Recoveries made by ED would ultimately benefit the general public,” said the first officer.
