
Why ED has summoned Anil Ambani on August 5
What's the story
The Enforcement Directorate (ED) has summoned Reliance Group Chairman Anil Ambani for questioning on August 5. The summons is in connection with an alleged loan fraud and money laundering case involving his group companies. The case was registered in Delhi, where Ambani has been asked to appear at the ED headquarters.
Allegations
ED conducted searches at Ambani's premises last week
The summons come after the ED conducted searches at several companies and executives of Ambani's business group last week. The action is related to alleged financial irregularities and collective loan "diversion" of over ₹10,000 crore by multiple group companies. The investigation mainly relates to alleged illegal loan diversion of around ₹3,000 crore given by Yes Bank to Ambani's group companies between 2017-2019.
Search
Agency's search operations covered over 35 premises
The ED's search operations covered over 35 premises in Mumbai, belonging to 50 companies and 25 individuals, including several executives of Anil Ambani Group companies. The agency has alleged that just before the loan was sanctioned, Yes Bank promoters received money. It is investigating this nexus of "bribe" and the loan.
Investigation details
ED probing alleged violations in Yes Bank loan approvals
The ED is also probing alleged "gross violations" in Yes Bank loan approvals to such companies. These include back-dated credit approval memorandums, and investments proposed sans due diligence/credit analysis, in violation of the bank's credit policy. The loans are said to have been diverted to several group firms and "shell" (bogus) companies by the entities involved.
Broader inquiry
Money laundering case stems from CBI FIRs
The money laundering probe stems from at least two CBI FIRs and reports that were shared by the National Housing Bank, SEBI, the National Financial Reporting Authority (NFRA), and Bank of Baroda with the ED. These reports suggest a "well-planned and thought after scheme" to divert/siphon off public money by cheating the banks, shareholders, investors, and other public institutions.
Fraud classification
SBI has classified RCOM and Ambani as 'fraud'
The Indian government recently told Parliament that the State Bank of India (SBI) has classified Reliance Communications (RCOM) and Ambani as 'fraud.' SBI is also in the process of filing a complaint with the CBI. Meanwhile, ED is looking into a bank loan "fraud" of more than ₹1,050 crore between RCOM and Canara Bank, along with some undisclosed foreign bank accounts and assets.