Five years after he was questioned in the Yes Bank loan fraud case, industrialist Anil Ambani is once again under the scrutiny of investigative agencies. On July 24, the Enforcement Directorate (ED) raided premises linked to his companies in connection with a Rs 17,000 crore alleged money laundering investigation. Anil Ambani appeared before ED investigators on Tuesday. The ED action came some days after the State Bank of India classified the loan account of one of his companies as fraudulent, and markets regulator Securities and Exchange Board of India (SEBI) issued an order detailing a systematic diversion of funds. ED’s investigation The investigation flows from FIRs registered earlier by the CBI and inputs from institutions including SEBI, National Housing Bank (NHB), and Bank of Baroda, and covers several Reliance Anil Dhirubhai Ambani Group companies including Reliance Infrastructure, Reliance Power, Reliance Communications, and Reliance Home Finance Ltd (RHFL). The ED suspects a scheme of loan fraud and diversion of funds involving thousands of crores. Loans extended by RHFL and Reliance Commercial Finance Ltd were allegedly routed to group companies and shell firms, bypassing norms and creating a false impression of loan performance through evergreening. According to the preliminary investigation: * A Rs 3,000 crore loan from Yes Bank (2017-19) was allegedly diverted soon after disbursal. In some cases, the loan was sanctioned before due diligence, and backdated documentation was used. * Loans were allegedly onward lent on the day of sanction, often to firms with common addresses and directors. * “C Company”, an undisclosed related party, was used to route funds without disclosure. Reliance Infrastructure allegedly diverted Rs 10,000 crore in this way. * The group allegedly took a haircut of Rs 5,480 crore, receiving only Rs 4 crore in cash and the rest in inactive power distribution companies, with no chance of recovery. ED actions so far The July 24 searches covered 35 premises, including 50 companies and 25 individuals, including senior Reliance Group officials. On August 5, Anil Ambani is learnt to have told the ED that he had no knowledge of several of the alleged fraudulent transactions and loan disbursals, and asked for a week’s time to verify the details. The agency has written to a dozen banks including SBI, Axis Bank, ICICI Bank, and HDFC Bank, asking for details of due diligence on loans sanctioned to his companies, including RHFL and Reliance Communications. On August 4, Partha Sarathi Biswal, managing director of Biswal Tradelink Pvt Ltd (BTPL), was arrested for allegedly arranging fake bank guarantees worth Rs 68.2 crore that were provided by Reliance Power for a Solar Energy Corporation of India (SECI) tender. The ED is also examining the role of Yes Bank officials and probing possible quid pro quo. Under the scanner is a Rs 2,850 crore investment by Reliance Mutual Fund in AT-1 bonds of Yes Bank. SBI loan fraud case On June 13, SBI, in accordance with the Reserve Bank of India’s directions on fraud risk management, classified Reliance Communications, along with promoter director Anil Ambani, as “fraud”. The bank is in the process of lodging a complaint with the CBI. SBI’s credit exposure in RCom includes fund-based principal outstanding amount of Rs 2,227.64 crore along with accrued interest and expenses with effect from August 26, 2016, and non-fund-based bank guarantee of Rs 786.52 crore. The loan was declared fraudulent on the ground that the company had used the funds in violation of “agreed terms”, and due to “irregularities observed in the conduct of the account of Reliance Communications”. RCom has said that it is undergoing a corporate insolvency resolution process, and has earlier reported outstanding debt of Rs 40,400 crore. The company has said that the loans referred to by SBI pertain to the period before the insolvency resolution process, and are required to be resolved through the process. Two group companies, Reliance Power and Reliance Infrastructure, said in separate but identical regulatory filings that the ED action has had “absolutely no impact” on their business operations, financial performance, shareholders, employees, or any other stakeholders. “The media reports appear to pertain to allegations concerning transactions of Reliance Communications Limited (RCOM) or Reliance Home Finance Limited (RHFL) which are over 10 years old,” the companies said. SEBI’s findings In a strong order earlier this year, SEBI laid out how RHFL and its key executives, including Anil Ambani, allegedly orchestrated a fraud on public investors and shareholders. * Rs 12,487 crore in loans were disbursed to 47 shell companies (Potentially Indirectly Linked Entities) between FY17 and FY19. * Many of these companies shared common addresses, directors, or email domains with Anil Ambani group firms. * Deviations from credit policies were routine: loans disbursed on the day of application, backdated sanction memos, incomplete documentation, no security creation. * Loans were allegedly routed to repay earlier loans — an evergreening loop that misrepresented financial health. * A forensic audit by Grant Thornton found that in many cases, the funds ended up back with group companies like Reliance Capital, Reliance Infra, and Reliance Big Entertainment. * SEBI said the GPCL (General Purpose Corporate Loan) scheme was a facade for diversion. It restrained Anil Ambani and top company executives from accessing the securities market, pending further proceedings. Anil Ambani’s troubles The developments have come as Anil Ambani was trying to rebuild after years of financial and reputational setbacks. His troubles began soon after the high-profile split with brother Mukesh Ambani. Companies such as Reliance Communications, Reliance Capital, and Reliance Power collapsed under financial strain — RCom shut down operations in 2019 with liabilities exceeding Rs 46,000 crore. The downfall was marked by defaults, insolvency proceedings, and regulatory actions, including a five-year SEBI ban on Anil Ambani for allegedly orchestrating a scheme to siphon off funds. His troubles extended to defence and infrastructure ventures. Reliance Naval failed to deliver key defence contracts and entered bankruptcy. Other high-profile ventures like Dassault Reliance Aerospace played only modest roles in India’s defence sector. Anil Ambani stepped down from several board positions, and group assets were either sold or restructured through insolvency proceedings. A slow turnaround began in 2022. The group pivoted to clean energy, infrastructure, and defence manufacturing. Reliance Power achieved zero debt, and new defence partnerships were forged with European companies. —With inputs from Mahender Singh Manral
