24-07-2025
- Business
- New Indian Express
ED raid on Anil Ambani companies: What led to this investigation
CHENNAI: The Enforcement Directorate (ED) on Thursday raided over 35 premises, 50 companies, and around 25 individuals linked to Anil Ambani's Reliance Group under Section 17 of the Prevention of Money Laundering Act (PMLA) in connection with an alleged Rs 3,000 crore loan scam involving Yes Bank.
According to preliminary findings, the ED has uncovered a 'well-planned scheme' to siphon or divert Rs 3,000 crore between 2017 and 2019. The agency suspects bribe payments to Yes Bank promoters' personal accounts shortly before the loan disbursals.
Yes Bank–Rana Kapoor Probe
The case builds on a broader investigation that began in 2020, when the ED linked Anil Ambani's group of companies—including nine entities that had borrowed nearly Rs 12,800 crore—to money laundering activities involving Yes Bank's then-promoter Rana Kapoor. Ambani was interrogated under PMLA provisions, with sessions reportedly lasting over nine hours.
The 2020 probe also covered other major borrowers such as Essel, DHFL, Cox & Kings, Jet Airways, and Indiabulls, focusing on alleged kickbacks and irregularities in loan sanctioning.
RCom Loan Fraud Allegations Involving Other Banks
In June 2025, State Bank of India (SBI) independently classified the loan account of Reliance Communications (RCom) and its promoters as "fraud", and reported the case to the Reserve Bank of India (RBI). The exposure included Rs 2,227 crore in fund-based and Rs 786 crore in non-fund-based loans.
SBI's classification cited serious allegations, including diversion of funds, misuse of loan proceeds, circular transactions among group companies, and unexplained invoice irregularities
This action followed a series of show-cause notices and forensic audit reviews conducted in December 2023, March 2024, and September 2024, in line with the RBI's updated fraud reporting framework.
SBI's forensic audit revealed that RCom and its affiliated entities borrowed over ₹31,500 crore from various banks. Of this, about Rs 13,667 crore (44%) was used to repay earlier loans; Rs 12,692 crore (41%) was transferred to related parties; and over Rs 6,265 crore was allegedly diverted for unauthorised purposes.
The audit also highlighted a complex intra-group fund movement strategy, where loans were routed through subsidiaries such as Reliance Telecom (RTL) and Reliance Infratel (RITL) to settle unrelated liabilities.
Divergence Among Lenders: Canara Bank's Reversal
Another lender, Canara Bank, had also previously marked RCom's account as fraudulent. However, in July 2025, it withdrew the classification in the Bombay High Court, reversing its earlier stance—highlighting inconsistencies in how banks are responding to the same borrower.
However, in mid-2024, the RBI revised its Master Directions on Frauds, mandating a 21-day notice period, and a fair hearing process for borrowers
before any loan account is declared fraudulent.
These reforms were prompted by Supreme Court observations against earlier unilateral practices by lenders.
Key Implications
Once an account is flagged as fraud, the borrower becomes ineligible for new credit from regulated financial institutions for five years.
SBI's decision to file a complaint with the CBI could trigger criminal investigations and possible legal proceedings against Anil Ambani and others.
The reversal by Canara Bank has added regulatory ambiguity, as banks adopt differing interpretations of similar forensic evidence.
RCom and Anil Ambani's Response
RCom argues that under Section 32A of the Insolvency and Bankruptcy Code (IBC), it is shielded from legal proceedings for acts committed before insolvency proceedings began in June 2019. Anil Ambani's legal team contends that he served only as a non-executive director, with no role in day-to-day management.
The legal team of Ambani also stated that SBI's classification was issued ex parte, without a full hearing or disclosure of forensic findings, and similar notices against other independent directors were previously withdrawn.
ED's Investigative Focus and Legal Context
In the Yes Bank case, the ED has alleged that diversion of funds for unauthorised uses, back-dating of Credit Approval Memorandums (CAMs), and lack of due diligence.
There is also suspicion of bribery, as funds were reportedly transferred to Yes Bank promoters' personal accounts just prior to loan approvals.
The ED's investigation is being assisted by inputs from other regulatory agencies, including the CBI, NHB, SEBI, NFRA, and Bank of Baroda.
Under Section 17 of PMLA, the ED is empowered to conduct searches and seizures to gather evidence in suspected money laundering cases.
What Next
The ED will continue interrogations and evidence collection to establish the diversion-bribery nexus.
SBI's complaint could also result in a CBI FIR and potential criminal prosecution. And, the regulatory oversight on borrower classification and restructuring will likely intensify.
While the Rs 3,000 crore loan diversion case marks the most significant escalation in the ongoing Yes Bank probe, which began in 2020 and involves multiple high-profile borrowers, including Anil Ambani, the evolving status of 'fraud' tags—alongside RBI's reforms and banks' varied responses—signals increasing regulatory assertiveness and growing accountability in high-value corporate lending.
