New Delhi: Reliance Group chairman Anil Ambani will appear before the Enforcement Directorate (ED) on Tuesday in response to a summons in connection with a money laundering probe linked to an alleged Rs 17,000-crore bank loan fraud involving several of his group companies.
The ED has issued a Look Out Circular (LOC) against Anil Ambani to prevent him from travelling abroad.
According to sources, Anil Ambani left Mumbai earlier in the day for New Delhi where he is to appear before the ED. His statement will be recorded under the Prevention of Money Laundering Act (PMLA), it has come to be known.
The ED launched a major crackdown in July during which it searched 35 premises linked to nearly 50 companies and 25 people, including top executives from the Reliance Group. The three-day operation began on July 24 and focused on suspected financial irregularities and large-scale diversion of bank loans.
The probe primarily centres around several group companies, including Reliance Infrastructure (R Infra), which are suspected to have diverted loans worth over Rs 17,000 crore.
The ED cited a report by the Securities and Exchange Board of India (SEBI), claiming that Reliance Infrastructure diverted funds to other Reliance Group entities under the guise of inter-corporate deposits (ICDs). The transactions were routed through a company called CLE, which, investigators claimed, was not disclosed as a “related party” by R Infra, reportedly in an attempt to bypass mandatory approvals from shareholders and audit committees.
The ED has also written to 39 banks, seeking explanations on their due diligence lapses. The agency has questioned why these banks failed to flag the loans as suspicious or report them to authorities when the borrowing entities began defaulting on repayments.
“The silence of the banks even after loan defaults raises serious questions. These institutions had a legal duty to alert the authorities, which they failed to do,” India Today TV quoted an official as saying.
On August 1, Partha Sarathi Biswal, managing director of Biswal Tradelink Pvt Ltd, was arrested under the PMLA. This was in connection with alleged financial irregularities linked to Reliance Power. Officials claimed that Biswal arranged fake bank guarantees worth Rs 68.2 crore on behalf of Reliance Power.