Anil Ambani's Reliance Group Faces New Investigation Over Fund Misuse

The regulatory landscape for Anil Ambani's Reliance Group has become increasingly complex as the Ministry of Corporate Affairs (MCA) has initiated a new investigation into allegations of fund diversion across several of its subsidiaries. This comes amid ongoing scrutiny by key enforcement agencies, including the Enforcement Directorate (ED), the Central Bureau of Investigation (CBI), and the Securities and Exchange Board of India (SEBI). The investigation will focus on multiple group entities, including Reliance Infrastructure, Reliance Communications, Reliance Commercial Finance, and CLE Private Limited.

According to sources familiar with the matter, the case has been escalated to the Serious Fraud Investigation Office (SFIO) following preliminary findings from the MCA that suggest significant financial irregularities and violations of the Companies Act. The SFIO is expected to investigate the financial flows between these entities and determine the accountability of senior management.

This latest development coincides with intensified actions by the ED against the debt-laden conglomerate, which recently led to the attachment of assets valued at approximately ₹7,500 crore (around £750 million) connected to Reliance Group firms. These assets include 30 properties belonging to Reliance Infrastructure and several others associated with different entities such as Adhar Property Consultancy and Mohanbir Hi-tech Build.

The ED's ongoing investigation centres on loans obtained by Reliance Communications and its affiliates during the period from 2010 to 2012. Reports indicate that outstanding dues amount to ₹40,185 crore, with five banks categorising the loan accounts as fraudulent. Investigators allege that funds raised were misappropriated within the group, diverted to related parties, and used to service existing debts, contravening the terms of the original loans.

"From around 2010 to 2012, Reliance Communications and its associated companies raised substantial amounts from Indian banks, with ₹19,694 crore still outstanding," the ED stated. The agency further noted that numerous entities within the Reliance Group were implicated in the alleged financial misconduct.

The ED's findings suggest that at least ₹13,600 crore was improperly diverted through intricate transactions, with some funds reportedly transferred abroad. Companies including Reliance Home Finance, Reliance Commercial Finance, Reliance Infrastructure, and Reliance Power are all under scrutiny.

Earlier investigations by the CBI and ED included searches at the residences and offices of Anil Ambani and other senior officials within the group. One senior finance executive associated with the group has been arrested in connection with these ongoing inquiries.

Reliance Group has faced various insolvency proceedings recently as it grapples with mounting debt pressures. Reliance Communications is currently undergoing insolvency proceedings, while other group companies are entangled in lawsuits and recovery actions initiated by creditors.

The MCA's decision to escalate the investigation to the SFIO indicates a serious commitment to uncovering the financial practices within the group and reinforcing accountability among its leadership. The ongoing actions by the ED and the classification of loans as fraudulent present significant legal and financial challenges for the conglomerate.

In a related response to the ED’s asset attachments, Reliance Group has asserted that these actions will not materially affect the operations or performance of Reliance Infrastructure or Reliance Power. The group clarified that the most substantial assets attached belong to Reliance Communications, which has been under a Corporate Insolvency Resolution Process (CIRP) for over six years and is no longer part of the group since 2019.

Reliance Group has outlined that Reliance Infrastructure is a zero-debt company with significant assets and a robust shareholder base. Similarly, Reliance Power has also reported no bank debt and a strong asset portfolio. Both companies have lodged formal complaints with SEBI, alleging a systematic campaign against them involving price manipulation and market interference.

As this situation evolves, the focus remains on the outcomes of these investigations and the potential ramifications for Anil Ambani and his business empire.