Reliance Communications & Reliance Telecom Declared Fraud by Bank of India

Mumbai, August 23, 2025 – Reliance Communications Limited (RCOM) and its subsidiary Reliance Telecom Limited (RTL) have been officially classified as “Fraud Accounts” by the Bank of India, in a move that directly implicates Anil Dhirajlal Ambani, former promoter and director of the group.

This development comes under Regulation 30 of SEBI’s LODR framework, with the company making mandatory disclosure to both BSE (532712) and NSE (RCOM).

📌 Key Highlights of the Disclosure

Companies Involved: Reliance Communications Limited (RCOM) & Reliance Telecom Limited (RTL).
Promoters/Directors Named:
- Shri Anil Ambani (Promoter & Ex-Director, RCOM)
- Smt. Manjari Ashok Kacker (Ex-Director, RCOM)
- Smt. Grace Thomas (Ex-Director, RTL & current Director, RCOM)
- Other directors of RTL (as per forensic audit findings).
Loan Accounts Classified: Fraud by Bank of India.
Outstanding Dues:
- RCOM – ₹724.78 crore (as of Aug 7, 2025).
- RTL – ₹51.77 crore (as of Aug 7, 2025).
Trigger Point: Accounts turned NPA on June 30, 2017.
Forensic Audit: Conducted by BDO India LLP, covering the period 2013–2017.

🔍 Forensic Audit Observations

The audit highlighted serious irregularities in loan usage:

Funds sanctioned for capital expenditure were instead diverted into fixed deposits.
Inter-company transfers between RCOM, RTL, and related entities violated loan terms.
Diversion of ₹350 crore BOI loan & ₹310 crore SCB loan into FDs, later used for alternate purposes.
RTL loan of ₹50 crore diverted to RCOM, breaching sanction conditions.
Overall siphoning and misappropriation of funds causing wrongful loss to banks.

Conclusion: The auditors stated the actions amounted to fraudulent conduct.

🏛 Company’s Response

RCOM and RTL, both under Corporate Insolvency Resolution Process (CIRP) since 2019, argued:

Any classification as fraud is barred by moratorium under Section 14 of IBC.
Resolution plans approved by creditors are awaiting NCLT clearance.
Under Section 32A of IBC, companies gain immunity from offences once resolution plans are approved.
The alleged transactions relate to the pre-CIRP period (2013–2017), before insolvency commenced.

Despite these arguments, the Bank of India has rejected the submissions and proceeded with fraud tagging.

🏦 Bank of India’s Final Decision

RCOM & RTL loan accounts classified as Fraud.
Anil Ambani and Manjari Ashok Kacker named under fraud.
Several independent directors (who joined after 2017) were spared, classified as No Fraud.
Fraud classification will be reported to law enforcement agencies for further action.

📊 Market Impact & Investor Sentiment

RCOM shares, already under suspension due to insolvency, may see increased volatility in grey market discussions.
The Reliance Anil Dhirubhai Ambani Group (ADAG) continues to face credibility issues, impacting investor trust across group entities.
Lenders may push for faster resolution and stricter accountability.
Retail investors, many of whom had lost money in RCOM’s collapse, are once again reminded of the risks of debt-heavy telecom bets.

🔮 What Lies Ahead?

The NCLT’s approval of resolution plans for RCOM and RTL remains crucial.
If approved, Section 32A protections may shield the companies from liabilities of past fraud.
However, individual directors/promoters (like Anil Ambani) may still face personal legal consequences.
The case sets an important precedent in India’s insolvency and banking regulation framework.