The troubles of former top executives of Anil Dhirbhai Ambani Group (ADAG) companies and Reliance Commercial Finance Limited (RCFL) seem to be increasing. Axis Bank Vice President Prakash Prabhakar Rao, on behalf of the bank, has filed a serious complaint against these companies and their officials for fraud and siphoning of funds.
According to the complaint, Axis Bank had sanctioned a cash credit facility of Rs 50 crore and a working capital limit of Rs 20 crore to Reliance Capital in July 2010. After demerger in 2017, this loan was transferred to Reliance Commercial Finance Limited (RCFL). In January 2020, the bank had declared this account as NPA (Non Performing Asset).
Shocking revelations in forensic audit
Huge irregularities have been found in the forensic audit of ‘Grant Thornton India LLP’ conducted under the leadership of Bank of Baroda. Loan amount of approximately Rs 1,867.89 crore was diverted to repay loans of shell companies (PILE) linked to ADAG Group without any solid business foundation. The audit found that an amount of Rs 1,199.29 crore was sent back to RCFL through complex transactions and intermediaries to conceal the actual utilization of funds.
Ignoring the loan terms, Rs 344.89 crore was invested in mutual funds and Rs 200.38 crore was spent in allotment of other loans. The company shared false information with the bank about its true financial position and its relationship with ADAG Group.
Big officials of RCFL and Reliance Group named in the complaint
In its complaint, Axis Bank has named the then top officials of RCFL and Reliance Group, which include Devang Praveen Modi (then CEO, RCFL), Amit Vijay Singh Bafna (then CFO, RCFL), Amitabh Jhunjhunwala (then Vice President, Reliance Capital Limited). Apart from this, legal action has also been demanded against Reliance Infrastructure, Reliance Power and the respective promoters.
According to complainant Prakash Rao, the accused presented fake documents and misleading information in mutual collusion and in a well-planned criminal conspiracy with the aim of causing financial loss to the bank and providing illegal benefits to themselves. At present this matter remains a subject of investigation within the ambit of Mumbai’s banking system and law. Based on the complaint of the bank, EOW of Mumbai Police has registered a case under sections 409, 420, 477 (A), and 120 (B) of IPC and started investigation.
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