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ED attaches Reliance Group properties worth Rs 1,120 crore in diversion of public funds

NEW DELHI: The Enforcement Directorate (ED) has attached over 18 properties and assets worth 1,120 crore belonging to Reliance Anil Ambani Group entities, taking the cumulative attachments in the case to 10,117 crore. The action stems from an investigation into the alleged fraudulent diversion of public funds routed through Yes Bank to Anil Ambani group companies. According to the agency, Yes Bank invested 5,010 crore in group companies between 2017 and 2019, which later turned non-performing. The EDs probe has revealed that over 11,000 crore in public funds was channelled circuitously through Yes Bank to the groups firms. The agency said that seven properties of Reliance Infrastructure Limited, two properties of Reliance Power Limited, nine properties of Reliance Value Service Private Limited, fixed deposits of Reliance Value Service Private Limited, Reliance Venture Asset Management Private Limited, Phi Management Solutions Private Limited, Adhar Property Consultancy Pvt Ltd, Gamesa Investment Management Private Limited, and further investments made in unquoted investment by Reliance Venture Asset Management Private Limited and Phi Management Solutions Private Limited were attached. Earlier, the ED had attached assets worth over 8,997 crore in bank fraud cases involving Reliance Communications Ltd (RCOM), Reliance Commercial Finance Ltd, and Reliance Home Finance Ltd. The agency alleged that several Reliance Anil Ambani group companies, including Reliance Communications Ltd, Reliance Home Finance Ltd (RHFL), Reliance Commercial Finance Ltd (RCFL), Reliance Infrastructure Ltd (RIL), and Reliance Power Ltd, engaged in fraudulent diversion of public money. During 20172019, Yes Bank invested 2,965 crore in RHFL instruments and 2,045 crore in RCFL instruments. By December 2019, these had become non-performing investments. The outstanding was 1,353.50 crore for RHFL and 1,984 crore for RCFL. The EDs investigation into RHFL and RCFL revealed that both entities had received public funds exceeding 11,000 crore. Before Yes Bank invested this money in Reliance Anil Ambani group companies, the bank had received huge sums from the erstwhile Reliance Nippon Mutual Fund. As per SEBI regulations, Reliance Nippon Mutual Fund could not invest or divert funds directly into Anil Ambani group finance companies due to conflict-of-interest rules. Therefore, public money in mutual fund schemes was routed indirectly by them. The path ran through Yes Banks exposures. The public funds reached Anil Ambani group companies through a circuitous route, the agency said. The ED initiated the probe on the basis of a case registered by the CBI against RCOM, Anil Ambani, and others. RCOM and its group companies had availed loans from domestic and foreign lenders from 2010 to 2012 onwards, with a total outstanding amount of 40,185 crore. A total of nine banks have declared the loan accounts of the Group as fraud, the agency said. During the probe, it was revealed that loans taken by one entity from one bank were utilised for repaying loans taken by other entities from other banks, transferred to related parties, and invested in mutual funds, in contravention of the terms and conditions of the sanction letters of the loans. In particular, RCOM and its group companies diverted over 13,600 crore for the evergreening of loans; over 12,600 crore was allegedly diverted to connected parties; and more than 1,800 crore was invested in fixed deposits and mutual funds, most of which was later liquidated and rerouted to group entities. Huge misuse of bill discounting for the purpose of funnelling funds to connected parties has also been detected by ED. Certain loans were siphoned off outside India through foreign outward remittances, the agency said.