The bank accounts of Reliance Communication, Reliance Telecom and Reliance Infratel — all owned by Anil Ambani — have been classified as “fraud” the State Bank of India has told the Delhi High Court, opening up possibilities of a probe by the Central Bureau of Investigation. The court has asked the bank to maintain status quo on the accounts.
The former Director of Reliance Communication, Punit Garg, had gone to the High Court challenging the Reserve Bank’s 2016 circular, regarding declaration of accounts as fraud. He had contended that
the circular is against the principle of natural justice, as accounts can be declared as fraud without hearing the parties.
Today, the bank said its audit division has found evidence of diversion of funds, and other irregularities.
Under the Reserve Bank rule challenged, an account can turn into a Non Performing Asset for default of payment for a period.
Banks then conduct forensic audit on these accounts and if the audit reveals misappropriation of funds, diversion, siphoning of funds etc, which are all illegal activities, the account is classified as “fraud”.
Once an account is declared as “fraud”, the matter has to be reported to the Reserve Bank within a week.
The rules also say the bank should file a complaint with the Central Bureau of Investigation if the amount involved in the fraud is above Rs 1 crore. If the amount is less than one crore, the local police investigates the issue. This should be done within 30 days of the reporting to the Reserve Bank.
Though the court has ordered status quo on the accounts, the bank can continue with its investigation and the mandatory filing of complaints when an account is declared fraud.
At the time of filing of bankruptcy, creditors had claimed Reliance Communications owed over 49,000 crore Reliance Infratel owed over 12,000 crore and Reliance Telecom owed it over 24,000 crore according the data made available on the website of the Rcom.
Comment of the spokesperson is awaited.