After SBI and BOI, Bank of Baroda tags Anil Ambani’s loan accounts as fraud

New Delhi: Bank of Baroda has classified the loan accounts of Reliance Communications Ltd. (RCom) and its former Director, Anil Ambani, as ‘fraud’, according to an exchange filing on Thursday.

Which loans are involved?

The bank’s action concerns loans taken before RCom entered the corporate insolvency resolution process (CIRP).

The company has clarified that the loans in question relate to the period prior to the beginning of insolvency proceedings.

RCom stated that these loans are to be addressed only through a resolution plan or liquidation under the Insolvency and Bankruptcy Code (IBC), 2016.

RCom is currently managed by a resolution professional, Anish Niranjan Nanavaty. Anil Ambani is no longer on the board of the company. A resolution plan has already been cleared by the committee of creditors and now awaits approval from the National Company Law Tribunal (NCLT).

How has RCom responded?

The company has said it is seeking legal advice on Bank of Baroda’s decision. RCom also pointed out that during the CIRP, it is shielded from the start or continuation of any cases or proceedings against it. This protection also extends to the enforcement of judgments, decrees or orders issued by courts, tribunals, or arbitration panels.

Wider investigation

The Enforcement Directorate (ED) is carrying out an ongoing probe into alleged loan fraud linked to entities connected with Anil Ambani. Reports indicate that the ED has requested details from 12–13 banks concerning loans to Reliance Housing Finance, Reliance Communications, and Reliance Commercial Finance. The total amount under scrutiny is estimated at nearly ₹17,000 crore.

Bank of Baroda has confirmed it will report the fraud classification to all required authorities, including the Reserve Bank of India (RBI). The reporting will be in line with the RBI’s Master Directions on Fraud Risk Management for Commercial Banks and All India Financial Institutions.

What does this mean for RCom?

This latest decision adds further complexity to RCom’s ongoing insolvency process, which has been in place since June 2019. The company, headquartered in Navi Mumbai, has had its assets and business overseen by a resolution professional appointed by the NCLT.

In June, the State Bank of India (SBI) had also classified RCom’s loan accounts as fraud. More recently, on 24 August, Bank of India declared RCom’s loan accounts fraudulent and included Anil Ambani’s name, citing allegations of fund diversion and breaches of loan terms.

(IANS inputs)