Big blow to Anil Ambani, SBI takes action against Reliance Communications over..., banks says it would report to...

The State Bank of India (SBI) has decided to report the loan account of Reliance Communications as “fraud” in a case that dates back to August 2016. It has initiated action to report the company’s director, Anil Dhirubhai Ambani, to the Reserve Bank of India (RBI). The company said in an exchange filing that this disclosure is being made pursuant to the rules of the Securities and Exchange Board of India (SEBI). The bank said the decision was taken after examining multiple show cause notices and forensic audits.

Why is Anil Ambani’s Reliance Communications’ loan account classified as ‘fraud’?

“This is to inform you that Company has received letter dated June 23, 2025 (received on June 30, 2025) from SBI (marked to he Company and its erstwhile director - Shri Anil Dhirajlal Ambani), inter alia, stating that SBI has decided to report the loan account of the Company as “fraud” and to report the name of Shri Anil Dhirajlal Ambani (erstwhile director of the Company) to the RBI, as per the extant RBI guidelines,” the company said in the BSE filing. Reliance Communications is part of the Anil Ambani-led Reliance Group. The company is undergoing a corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016. 
 
Is Reliance Communications protected under the Insolvency and Bankruptcy Code?

Reliance Communications said its company has been under the corporate insolvency resolution process (CIRP) since 2019. “A resolution plan has been approved by the committee of creditors of the Company in accordance with the Code and is presently awaiting approval of the National Company Law Tribunal, Mumbai Bench,” the exchange filing read. “The credit facilities/loans referred to in the Letter from SBI dated June 23, 2025 (received on June 30, 2025) pertain to the period prior to the CIRP of the Company (as identified within the letter), and are required in terms of the Code, to be necessarily resolved as a part of a resolution plan or in liquidation, as the case may be,” it added. The company is likely to have no material impact after the fraud classification, given the legal safeguard. However, the company is seeking legal advice on the matter after the development. 

The SBI issued show-cause notices to the company earlier in December 2023, March 2024 and again in September 2024. The nation’s largest lender apparently found that the company failed to explain why it broke the terms of the loan. The bank also said the company did not satisfy its questions about irregularities in how the account was run.

(With inputs from IANS)