ED Enforcement Direactorate (ED) Department Action On Anil Ambani’s Companies Completed: Raids At 35 Places In 3 Days; ₹ 3000 Crore Loan Fraud Allegations

The raid of the Enforcement Directorate (ED) on more than 35 locations associated with Anil Ambani’s Reliance Group was completed on Sunday. The action started on July 24, which lasted for three days. The raid consists of about 50 companies. More than 25 people have also been questioned.

Reliance Group companies Reliance Power and Reliance Infrastructure gave this information through exchange filing on Sunday. The two companies told the stock exchange that the action would not have any effect on their business, financial performance or shareholders.

According to media reports, raids were conducted in Delhi and Mumbai in a loan fraud case of Rs 3000 crore taken from Yes Bank. The raids were conducted under Section 17 of the Money Laundering Prevention Act (PMLA).

According to news agency PTI, the action has been taken on the basis of two FIRs lodged by the CBI and information received from agencies like SEBI, National Housing Bank, Bank of Baroda and National Financial Reporting Authority (NFRA).

Reliance Power and Reliance Infrastructure statement

The company said that the action of the Enforcement Directorate (ED) has completely ended. The company and all its officials have fully supported and will continue to cooperate with the officials in future also.

This action of ED will not have any effect on the company’s business, financial performance, employees, employees. This action relates to allegations that relate to the 10-year transaction of Reliance Communication Limited (RCom) or Reliance Home Finance Limited (RHFL).

Anil Ambani is not in the board of both companies, so action on RCom or RHFL will have no effect on their operations, management or shareholders. Reliance Power and Infra is a separate and independent listed company that has no commercial or financial relations with RCom or RHFL.

Now understand the whole matter in 5 questions and answers:

Question 1: Why has the ED action against Anil Ambani’s group?

Answer: The matter is related to loans worth about Rs 3,000 crore given by Yes Bank to Reliance Group companies associated with Anil Ambani between 2017 and 2019.

ED’s initial investigation has shown that these loans were reportedly transferred to fake companies and other units of the group. Investigations have also revealed that senior officials of Yes Bank may have been given bribe.

Question 2: What else was revealed in the ED investigation?

Answer: The ED says that it was a “well -planned and well -planned” plan, under which money was grabbed by giving incorrect information to banks, shareholders, investors and other public institutions. Many irregularities were found in the investigation, such as:

Loans to companies with weak or uncertainty.
Use of the same director and address in many companies.
Lack of necessary documents related to loan.
To transfer funds to fake companies.
The process of giving new loan to repay old loans (debt evergreen).

Question 3: What is the role of CBI in this case?

Answer: The CBI had registered an FIR in two cases. These cases are related to two different loans given by Yes Bank to Reliance Home Finance Limited and Reliance Commercial Finance Limited. In both cases, the CBI named Rana Kapoor, former CEO of Yes Bank.

Subsequently, an official said that other agencies and institutions like National Housing Bank, SEBI, National Financial Reporting Authority and Bank of Baroda also shared information with ED. Now the ED is investigating the matter.

Question 4: What was the impact on Anil Ambani’s companies?

Answer: After the raid, the shares of Anil Ambani’s two major companies, Reliance Infrastructure and Reliance Power, have declined by 10% in two days.

Question 5: What else are there on Anil Ambani companies?

Answer: A few days ago, State Bank of India declared Anil Ambani’s company Reliance Communications and Anil Ambani himself as “fraud”.

SBI says RCom misused a loan of Rs 31,580 crore taken from the bank. Out of this, about Rs 13,667 crore was spent in repaying loans of other companies. 12,692 crore rupees were transferred to other companies of Reliance Group.

SBI also said that we are in the process of filing a complaint with the Central Bureau of Investigation (CBI) in this case. Apart from this, personal bankruptcy proceedings are also going on against Anil Ambani in the National Company Law Tribunal (NCLT) Mumbai.

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