Bank of Baroda has declared the loan accounts of Reliance Communications Ltd. (RCom) and its erstwhile Director, Anil Ambani, as ‘fraud’, according to an exchange filing.
The leading public sector bank said that it will report the fraud classification to various authorities as required by law, including the Reserve Bank of India (RBI).
This reporting will be done in compliance with the RBI’s Master Directions on Fraud Risk Management in Commercial Banks and All India Financial Institutions.
Reacting to the issue, a spokesperson for Anil Ambani said that the Bank of Baroda’s move to classify Reliance Communications Ltd. (RCom)’s loan account along with Ambani pertains to matters dating back more than a decade, and that the charges are “misdirected and unfounded.”
According to the statement, the matter relates to the period around 2013 and has already been disclosed in the public domain. The spokesperson stressed that Ambani served only as a Non-Executive Director of RCom from 2006 until his resignation in 2019 and was never an Executive Director or Key Managerial Personnel (KMP). “He had no role whatsoever in the day-to-day operations or decision-making of the company,” the statement said.
The spokesperson also pointed out that RCom had a lender consortium of 14 banks.
“After an inordinate lapse of more than 10 years, select lenders have now chosen to initiate proceedings in a staggered and selective manner targeting Ambani,” the statement said.
Currently, RCom is managed by a Committee of Creditors (CoC), led by State Bank of India (SBI) and supervised by a Resolution Professional. In March 2020, the CoC had unanimously approved the resolution plan of the successful applicant, but the process remains incomplete.
“The matter has been sub judice before the NCLT, the Hon’ble Supreme Court, and other judicial forums for the past six years, while the lenders have not taken steps to conclude the resolution,” the spokesperson added.
Denying all allegations and charges, Anil Ambani said he would pursue remedies available to him in accordance with legal advice.