Daijiworld Media Network- New Delhi
New Delhi, Sep 5: In a major setback to industrialist Anil Ambani, Bank of Baroda (BoB), one of India’s leading public sector lenders, has officially classified the loan accounts of Reliance Communications Ltd (RCom) and its former director Ambani as ‘fraud’.
The decision, announced through an exchange filing, pertains to loans sanctioned prior to RCom entering the Corporate Insolvency Resolution Process (CIRP).
Once among India’s prominent telecom giants, RCom has been battling insolvency since June 2019 under the Insolvency and Bankruptcy Code (IBC), 2016. The company clarified that the loans under question fall within the pre-insolvency period and are subject to resolution through an approved plan or liquidation process. Presently, its affairs are managed by Resolution Professional Anish Niranjan Nanavaty.
Anil Ambani has ceased to be a director of RCom. A resolution plan, already cleared by the committee of creditors, awaits approval from the National Company Law Tribunal (NCLT). Meanwhile, the company said it is consulting legal experts over BoB’s move, highlighting that CIRP offers protection against initiation or continuation of legal proceedings, decrees, or enforcement orders.
The development adds another layer to the financial turmoil of the Ambani-led group, already under the scanner of the Enforcement Directorate (ED) in connection with alleged loan frauds involving nearly Rs 17,000 crore across group entities including Reliance Housing Finance, RCom, and Reliance Commercial Finance. The ED has sought detailed loan records from about 12-13 banks.
Bank of Baroda, on its part, confirmed that it will notify concerned authorities, including the Reserve Bank of India (RBI), in line with the central bank’s guidelines on fraud risk management.
This action by BoB follows similar classifications made earlier by the State Bank of India (SBI) in June and Bank of India on August 24, both of which tagged RCom’s loan accounts as fraudulent citing alleged fund diversion and breach of loan terms.
The latest development is expected to have significant implications on RCom’s insolvency proceedings and also underscores the Indian banking sector’s growing resolve to act decisively against stressed corporate assets.