ED Raids Anil Ambani’s Reliance Group, Yes Bank For Third Straight Day: Money Laundering Probe Intensifies

Enforcement Directorate, an organization mandated with investigating money laundering, has continued its search against firms under Reliance Group Chairman Anil Ambani for the third consecutive day, gathering computer peripherals from several locations, and numerous documents, as per media reports.

The economic intelligence agency has launched its investigation on Thursday, July 24 against Anil Dhirubhai Ambani Group companies and Yes Bank, allegedly linked to a Rs 3,000 crore bank loan fraud.

The Enforcement Directorate conducted searches at more than 35 premises across Mumbai and Delhi, as part of its money laundering investigation under the Prevention of Money Laundering Act (PMLA).

These premises belong to 50 companies and 25 people including a number of executives of the Anil Ambani Group companies.

In a white paper release, Reliance Group clarified, "Reports appear to pertain to allegations in relation to transactions involving Yes Bank and Reliance Home Finance, which are more than 8 years old."

Further, Reliance Power and Reliance Infrastructure, two companies of the group, on Jul 24 informed the stock exchanges that while they acknowledge the action, the raids had 'absolutely no impact' on their business operations, financial performance, shareholders, employees, or any other stakeholders.

The ED has found that just before the loan was granted, Yes Bank promoters 'received' money in their concerns. The agency is investigating this nexus of 'bribe' and the loan, as per media reports.

Anil Ambani was the former Managing Director (MD) and Chairman of the Reliance Group of Companies. 

The sources said the ED is also probing allegations of 'gross violations' in Yes Bank loan approvals to these companies including charges like back-dated credit approval memorandums, investments proposed without any due diligence/credit analysis in violation of banks credit policy.

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The loans are alleged to have been 'diverted' to many group companies and 'shell' (bogus) companies by the entities involved.

The money laundering case stems from at least two CBI FIRs and reports shared by the National Housing Bank, SEBI, National Financial Reporting Authority (NFRA) and Bank of Baroda with the ED, they said. These reports indicate, the sources said, that there was a 'well-planned and thought after scheme' to divert or siphon off public money by cheating banks, shareholders, investors and other public institutions.

The centre had informed the Parliament recently that the State Bank of India has classified RCOM along with Ambani as 'fraud' and was also in the process of lodging a complaint with the CBI.

A bank loan 'fraud' of more than Rs 1,050 crore between RCOM and Canara Bank is also under the radar of the ED, excluding 'undisclosed' foreign bank accounts and assets, as per media reports.

Additional Tier 1 (AT-1) are perpetual bonds issued by banks to increase their capital base and they are riskier than traditional bonds having higher interest rates. An alleged loan fund diversion of about Rs 10,000 crore involving Reliance Infrastructure too is under the scanner of the agency. A Sebi report on RHFL is also part of the ED probe.

Meanwhile, the companies mentioned in their filings before Indian stock exchange bourses that Anil Ambani was not on the Board of either Reliance Power or Reliance Infrastructure and that they had no 'business or financial linkage' to RCOM or RHFL.