Why CBI has arrested 2 executives of Reliance Communications
What's the story
The Central Bureau of Investigation (CBI) has arrested two senior executives of Reliance Communications, a company controlled by Anil Ambani. The arrests were made in connection with a major bank fraud case involving the alleged diversion of funds and fraudulent transactions. The accused are Vishwanath D and Anil Kalya. They were arrested after the CBI registered a case against RCom, Ambani, and others on the basis of a complaint filed by the State Bank of India (SBI).
Fraud details
Wrongful loss of ₹19,694cr caused to 17 public sector banks
The CBI has alleged that banks sanctioned credit facilities to RCom, which were later misused by the accused borrowers. This resulted in wrongful losses of ₹292.05 crore to banks. The agency further claimed that a total wrongful loss of ₹19,694.33 crore has been caused to 17 public sector banks due to these fraudulent activities.
Fraud methods
Accused allegedly instrumental in diversion of funds
The CBI's investigation has revealed that Reliance Communications was involved in roundabout transactions via shell companies linked to its officials. The company also allegedly discounted letters of credit opened for fake service-related transactions with its group entities, causing huge losses to banks. Vishwanath, RCom's Joint President, oversaw the banking operations and is accused of being instrumental in the diversion of funds. He also coordinated with banks for sanctioning and disbursing loans.
Executive involvement
Both executives were part of core team handling finances
Anil Kalya, Vice President at RCom, actively assisted in these operations. Both he and Vishwanath were part of the core team that handled corporate finance, banking operations, the payments and fund utilization within the RCom Group. The arrested executives will be produced before a jurisdictional court as part of an ongoing investigation into this case.