Shares of Anil Ambani-led Reliance Group companies fell by 5% each on third consecutive day hitting the lower circuit limit on Tuesday, as Reliance Group Chairman Anil Ambani is set to appear before probe agency Enforcement Directorate today in Delhi for questioning in connection with an alleged Rs 17,000 crore worth bank loan fraud-linked money laundering case. The stock has been hitting lower circuit since Friday. The ED summons follows searches conducted last week across multiple companies and executives linked to Ambani's business group. The raids, which began on July 24 and lasted three days, targeted over 35 locations in Mumbai associated with 50 companies and 25 individuals, including key executives from the Anil Ambani Group.The federal probe agency has also notified a Look Out Circular (LOC) against the 66-year-old businessman to stop him from travelling abroad, according to PTI.
Moreover, the agency has written to 12-13 public-sector and private banks seeking details on due diligence followed on the loans sanctioned to Reliance Housing Finance, Reliance Communications and Reliance Commercial Finance. Details have been sought from the State Bank of India, Axis Bank, ICICI Bank, HDFC Bank, UCO and Punjab and Sind Bank. Preliminary investigation revealed an illegal loan diversion of around Rs 3,000 crores from Yes Bank (period 2017 to 2019). And later officials found out that Reliance Communications Ltd has also committed a loan fraud of over Rs 14,000 crores.
The agency last week made its first arrest in connection.Partha Sarathi Biswal, the managing director of Biswal Tradelink Pvt Ltd, was arrested on August 1 under the Prevention of Money Laundering Act (PMLA), 2002, for submitting fake guarantees worth Rs 68.2 crore, sources said. These guarantees, they said, were arranged on behalf of Reliance Power.Reliance Power and Reliance Infrastructure, two companies of the group, on July 26 informed the stock exchanges saying while they acknowledge the action, the raids had "absolutely no impact" on their business operations, financial performance, shareholders, employees, or any other stakeholders. This is not the first time the bank has labelled the account as fraudulent. SBI had earlier declared RCom and Mr Ambani as fraud accounts in November 2020 and filed a complaint with the CBI on January 5, 2021. The Delhi High Court issued a status quo order a day later, leading to withdrawal of the complaint.