SBI flags Anil Ambani’s RCom loan a/c as fraud

In a step that also implicates the company’s former director Anil Ambani, SBI has moved to classify the loan account of Reliance Communications as fraud. In a disclosure on July 1, RCom stated that SBI plans to report Ambani’s name to the RBI. The move sets off another round of legal contest amid the telco’s ongoing insolvency proceedings.The classification traces back to a 2020 forensic audit by BDO, which prompted SBI’s fraud panel to flag the account. Canara Bank had earlier declared the loan as fraud in Nov 2024, but that order was later set aside by Delhi HC. Ambani’s lawyers said SBI’s order was passed ex parte and in breach of natural justice. SBI tags RCom as ‘fraud a/c’ over alleged fund diversionMUMBAI: SBI has moved to classify the loan account of Reliance Communications as fraud, a step that implicates Anil Ambani, its former director. RCom disclosed the decision on July 1, stating that the country’s largest bank plans to report Ambani to RBI. The move sets off another round of legal contest amid the telco’s insolvency proceedings.The classification traces back to a 2020 forensic audit by BDO, which prompted SBI’s fraud panel to flag the account. Canara Bank declared the loan as fraud in Nov 2024, but that order was later set aside by the Delhi high court.Ambani’s lawyers from Agarwal Law Associates said that SBI’s order was passed ex-parte and in breach of natural justice. They argued that the show-cause notices are outdated under revised RBI rules, that Ambani had no executive role in the company’s operations, and that SBI failed to provide key documents needed for a reply. They called for the withdrawal of the order and asked for a personal hearing.In its latest review concluded on June 13, a committee of SBI flagged several financial irregularities. These included alleged diversion of Rs 12,692 crore, which was 41% of the loans of Rs 31,580 crore, to connected parties. The findings allege that sanctioned funds were misused, routed through subsidiaries to mask transactions, and used in inter-company loans that manipulated the company’s books. Circular transactions involving ICDs and intraday limits were also cited as attempts to raise funds by concealing facts.RCom, which is under an NCLT-appointed resolution professional, said the classification would have “NA” impact, pointing to protections available under the Insolvency and Bankruptcy Code. These include immunity from past actions once a resolution plan is in place.Ambani’s lawyers said the SBI order defies several rulings by the Supreme Court and the Bombay high court, along with RBI norms. They said SBI ignored Ambani’s objections for nearly a year and did not disclose the basis of its decision. Although similar notices were withdrawn against other non-executive and independent directors, Ambani, who held a comparable position, has been unfairly targeted, they said.