Anil Ambani refutes fraud allegations as BoB flags RCom loan
What's the story
Anil Ambani, the promoter and director of Reliance Communications (RCom), has strongly denied allegations of fraud. The denial comes after Bank of Baroda labeled RCom's loan accounts as 'fraud.' A spokesperson for Ambani said the bank's action is related to matters over 12 years old. The spokesperson clarified that Ambani was only a Non-Executive Director on RCom's board from its inception in 2006 until his resignation in 2019.
Clarification
Ambani had no role in RCom's operations
The spokesperson emphasized that Ambani had no role in the day-to-day operations or decision-making of the company. The debt of RCom was held by a consortium of 14 banks and after over a decade, some lenders have initiated proceedings against Ambani in a "staggered and selective manner," the spokesperson said. Currently, RCom is under the supervision of a Committee of Creditors led by SBI and managed by a Resolution Professional.
Legal proceedings
Resolution process has not been completed yet
The Committee of Creditors had approved a resolution plan in March 2020. However, the matter has been pending before the NCLT, Supreme Court, and other judicial forums for approximately five years now. The lenders have not yet completed the resolution process. "Mr. Anil Ambani categorically denies all allegations and charges and shall pursue remedies available to him in accordance with legal advice," said the spokesperson.
Company response
Reliance Infrastructure also issued a statement
Reliance Infrastructure, another company associated with Ambani, also issued a statement on the matter. The company said that Bank of Baroda's action to classify the loan account as fraud has no impact on its business operations or financial performance. "Disclosures and records available in public domain indicate that aforesaid classification by Bank of Baroda for Reliance Communications and Mr. Anil Ambani, pertains to matters dating back more than 12 years ago," Reliance Infrastructure said in a release.
Business focus
Reliance Infrastructure emphasized its independence as a listed entity
Reliance Infrastructure stressed its independence as a listed entity with no business or financial linkage to Reliance Communications. "Reliance Infrastructure continues to focus on its business plans and remains committed to creating value for all stakeholders," the company said. At the time of writing, Reliance Communications' share price was down 2.8% at ₹1.39 apiece on the BSE.