After the State Bank of India, Bank of India has declared the loan account of bankrupt Reliance Communications as fraud and has also included the name of its former director, industrialist Anil Ambani. According to regulatory filing, this information has been given in 2016, citing alleged misuse of money.
In August 2016, the Government Lander Bank of India gave a loan of Rs 700 crore to Reliance Communications for its ongoing capital and operational experience and payment of existing liabilities. According to the bank’s letter in the information filed by RCom in the stock exchange, half of the sanctioned amount distributed in October 2016 was invested in a fixed deposit, which was not allowed as per the acceptance letter.
CBI killed red
RCom said that it has received a letter from Bank of India on August 22, which has been informed by the bank to classify the loan account of “Company, Anil Dhirlal Ambani (company promoter and former director) and Manjari Ashok Kakkar (former director of the company) as fraud fraud. Earlier, State Bank of India (SBI) also did the same in June this year, in which violation of loan terms were accused of rigging the bank funds.
Following SBI’s complaint, the Central Bureau of Investigation (CBI) on Saturday searched the campus related to Reliance Communications and Ambani’s residence. The CBI said that it has filed a complaint after the State Bank of India, the Reliance Communications and Ambani, who is the younger brother of Asia’s richest person Mukesh Ambani, after claiming a loss of Rs 2,929.05 crore as a result of the alleged rigging.
Ambani spokesperson’s statement
Anil Ambani’s spokesperson in a statement “strongly denied all the allegations and prosecutions” and said that he would “defend himself”. The spokesman said that the complaint filed by SBI is related to more than 10 years old cases. At that time, Ambani was the non-executive director of the company and had no role in the company’s daily management. It is worth noting that SBI has already withdrawn the proceedings against five other non-executive directors by their order.
Despite this, Ambani has been targeted selectively. Reliance Communications said in a fresh filing that its subsidiary Reliance Telecom Limited has also received a letter from Bank of India in which the company, Grace Thomas (former director of RTL and current director of the company) and some other people have been informed about the decision to classify the loan accounts of other people as ‘fraud’.
How much debt on RCom
Under banking laws, once an account is declared fraud, it should be sent to enforcement agencies for criminal action, and the borrower is prevented from getting new finance from banks and regulated institutions for five years. In the information given to Reliance Communications, Bank of India said that RCom was converted into NPA on June 30, 2017 with an arrear of Rs 724.78 crore.
According to the letter, the bank is contacting borrowers and guaranteers for payment of arrears. However, they have failed to pay the outstanding amount and they have ignored it. Reliance Communications revealed in April that its total loan in March was Rs 40,400 crore. After the outstanding lones, the company was admitted for bankruptcy and bankruptcy proceedings. RCom is being managed under the supervision of a SBI -headed creditor committee, which is being inspected by a solution professional.