Major Enforcement Action Against Reliance Anil Dhirubhai Ambani Group

Enforcement Directorate Steps In

The Enforcement Directorate (ED) has intensified its efforts in addressing alleged financial irregularities linked to Reliance Home Finance Ltd (RHFL) and Reliance Commercial Finance Ltd (RCFL). Recently, the agency provisionally attached assets valued at ₹1,120 crore as part of an ongoing investigation into the financial dealings of the Reliance Anil Dhirubhai Ambani Group (Reliance ADAG). This brings the total value of assets attached in related cases to an impressive ₹10,117 crore, signalling one of the largest enforcement actions against a single corporate entity in recent history.

Details of the Attached Assets

According to reports from officials, the newly attached assets encompass a variety of holdings. These include over 18 immovable properties, multiple fixed deposits, bank balances, and stakes in unlisted investments. The assets are tied to various companies within the conglomerate, indicating a broad range of financial dealings under scrutiny.

Specific Companies Involved

Among the newly attached assets are properties associated with several key companies in the group, including:

• Reliance Infrastructure Ltd: Seven assets linked directly to this entity are now under attachment.
• Reliance Power Ltd: Two assets related to Reliance Power are also included.
• Reliance Value Services Pvt Ltd: Nine properties connected to this service are part of the latest enforcement action.

Additionally, fixed deposits and bank balances affiliated with several other entities, such as Reliance Venture Asset Management Pvt Ltd and Gamesa Investment Management Pvt Ltd, have also been included in the attachment.

Cumulative Financial Impact

Before this recent action, the ED had already attached properties worth ₹8,997 crore in cases connected to other entities of the Reliance group, including Reliance Communications (RCom). The accumulation of these actions has brought the overall provisional attachment total to over ₹10,117 crore, highlighting the extensive reach of the investigation.

Allegations of Fraud and Fund Diversion

The ED has pointed to serious allegations concerning the misuse of public funds by several companies in the Anil Ambani group. Key findings reveal:

• Between 2017 and 2019, Yes Bank invested substantial sums—₹2,965 crore in RHFL and ₹2,045 crore in RCFL—only for these investments to turn into non-performing assets (NPAs) by December 2019.
• The debts stand at ₹1,353.5 crore for RHFL and ₹1,984 crore for RCFL.

The Enforcement Directorate claims that these companies collectively received more than ₹11,000 crore of public funds, much of which may have been diverted through complex financial structures.

Regulatory Violations

Investigators allege that financial practices utilized by the group circumvented SEBI (Securities and Exchange Board of India) regulations. Specifically, funds originating from Reliance Nippon Mutual Fund, which is prohibited from investing in finance companies of the same group due to conflict-of-interest regulations, were allegedly channeled through Yes Bank. This intricate maneuvering is described as having funneled public funds to benefit various Reliance group entities.

Multi-Agency Inquiry Intensifies

The ED’s investigations are fueled by a CBI FIR that implicates RCom, Anil Ambani, and other officials in significant financial wrongdoing. According to this FIR:

• RCom and its affiliates raised extensive loans from domestic and international lenders between 2010 and 2012, accumulating an outstanding debt of ₹40,185 crore.
• Multiple banks classified these accounts as fraudulent, emphasizing severe financial malpractice.

The FIR indicates that group companies engaged in questionable practices, including loan repayments across different banks, fund transfers to related parties, and convoluted cycles of borrowing and investing within the group’s entities.

Findings on Financial Mismanagement

The ED report paints a stark picture of financial discrepancies within the group, revealing that:

• Over ₹13,600 crore was utilized for “evergreening” loan accounts, effectively masking financial distress.
• Around ₹12,600 crore was purportedly transferred to related parties.
• Significant funds were funneled into fixed deposits and mutual funds before being redirected back within the group.

Moreover, a portion of the diverted funds is suspected to have been transmitted abroad, raising concerns over potential siphoning activities.

This article systematically outlines the recent enforcement actions by the ED against Reliance ADAG and the underlying allegations, offering a clear insight into the intricate web of financial operations being investigated.