Mumbai: After SBI, Bank of India has also declared a Reliance Communications’ (RCom) loan account as fraudulent. The bank has named former director Anil Ambani in its letter, citing alleged fund diversion in 2016.
In its August 8 letter, disclosed by RCom to the stock exchange on August 23, Bank of India said it decided “to classify the loan accounts of the company, Anil Dhirajlal Ambani (promoter and erstwhile director of the company), and Manjari Ashok Kacker (erstwhile director of the company), as Fraud.”
Bank of India had sanctioned a Rs 700 crore loan to RCom in August 2016 for capital and operational expenses as well as repayment of liabilities. The bank stated that half the disbursed amount, given in October 2016, was invested in a fixed deposit in violation of the sanction terms. The loan turned non-performing on June 30, 2017, with an outstanding of Rs 724.78 crore.
“The Bank has been following up with the borrowers and guarantors for repayment of dues; however, they have failed and neglected to make repayment of the dues,” the bank wrote.
RCom’s subsidiary Reliance Telecom Ltd (RTL) also received a notice from Bank of India classifying its loan accounts, and those of erstwhile director Grace Thomas and other individuals, as ‘Fraud’.
The latest action comes after SBI filed a complaint with the Central Bureau of Investigation (CBI), alleging a loss of Rs 2,929.05 crore due to misappropriation by RCom and Ambani. Following the complaint, CBI conducted searches at RCom-linked premises and Ambani’s residence on Saturday.
Ambani’s spokesperson issued a strong denial. “The complaint filed by SBI pertains to matters dating back more than 10 years. At the relevant time, Ambani was a non-executive director of the company, with no involvement in the day-to-day management,” the statement said. “It is pertinent to note that SBI, by its own order, has already withdrawn proceedings against five other non-executive directors. Despite this, Ambani has been selectively singled out.”
Under banking laws, accounts tagged as fraudulent must be referred to enforcement agencies for criminal action, while borrowers are barred from fresh loans for five years.
RCom, which disclosed total debt of Rs 40,400 crore in March, is under insolvency and bankruptcy proceedings. Its operations are being supervised by a committee of creditors led by SBI and managed by a resolution professional.
