Anil Ambani BREAKS silence on India's largest govt bank's ‘fraud’ tag on Reliance firm's loan account

Anil Ambani, Reliance Group chairman, through his lawyers, has written to the State Bank of India (SBI), India's largest government bank, protesting against the classification of loan accounts of bankrupt Reliance Communications as fraudulent, saying the move violated RBI guidelines as well as court directions.

In the July 2 letter, the counsel said the SBI's order was shocking and had been passed ex-parte, and in violation of the principles of natural justice. SBI's order is in direct contravention of various judgments of the Supreme Court and the Bombay High Court, as well as RBI guidelines, the counsel said.

What RCom said

RCom, in a filing to stock exchanges on Wednesday, said that SBI is classifying its loan account as fraudulent, citing alleged diversion of funds in a case dating back to 2016. The counsel in the letter said SBI has not even responded to Ambani's communication about the invalidity of the show cause notice (SCN) for almost a year, and has not even provided the information forming the basis of their decision despite being repeatedly requested to enable him to respond to the SCN.

SBI, the counsel said, has also not allowed Ambani an opportunity of a personal hearing to make submissions against its allegations. SBI has withdrawn the show cause notice to other non-executive and independent directors of RCom. Ambani was also a non-executive director and not involved in the day-to-day affairs of RCom, and has been wrongly so categorised, the counsel said, adding Ambani is pursuing the matter as legally advised.

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"The Bank's SCN dated December 20, 2023 had been issued prior to the revised RBI Master Directions dated July 15, 2024 which completely superseded the directions under which the SCN had been issued (and which are no longer in existence), the Bank would need to withdraw the said SCN.

(Except for the headline, this story has not been edited by DNA staff and is published from PTI)