New Delhi: In a major development concerning one of the largest alleged corporate frauds in India, the Supreme Court on Wednesday directed the Enforcement Directorate (ED) to constitute a Special Investigation Team (SIT) to probe allegations of large-scale bank fraud involving Reliance Communications (RCOM), its group entities, and its promoter Anil Ambani.
A Bench comprising Chief Justice of India (CJI) Surya Kant, Justice Joymalya Bagchi, and Justice Vipul Pancholi emphasized the need for a focused and high-level investigation into the matter, which involves outstanding dues running into tens of thousands of crores.
The Court was hearing a petition filed by EAS Sarma, a former Secretary to the Government of India, who sought a court-monitored investigation into the financial dealings of RCOM. The petitioner argued that the current probes by the Central Bureau of Investigation (CBI) and the ED were inadequate and slow.
Addressing the Enforcement Directorate, the Court noted: "ED is well advised to constitute a SIT comprising senior officers and take all the measures so that the ongoing probe is taken to a logical conclusion."
To ensure accountability, the Bench directed both the CBI and the ED to file status reports every month. The Court expressed concern over the "unexplained delay" in the investigation so far, noting that while the allegations involve the siphoning of massive public funds, the agencies have taken significant time to act.
A significant highlight of the hearing was the undertaking given by Anil Ambani's legal team. Amid apprehensions raised by the petitioner and the government that the businessman might flee the country before the probe concludes, Senior Advocate Mukul Rohatgi, representing Ambani, gave a categorical assurance to the Bench.
"He will not leave without the permission of this court," Rohatgi told the Bench.
This statement sparked a sharp exchange between Rohatgi and Solicitor General (SG) Tushar Mehta. The SG reminded the Court of a past instance where a similar undertaking was given for a client who eventually fled. However, Rohatgi retorted that his client had returned and settled significant dues with the government.
The Court ultimately recorded the undertaking in its order, making it legally binding that Ambani cannot travel abroad without the specific "leave" (permission) of the Supreme Court.
The Supreme Court expanded the scope of the investigation beyond just the corporate house. It directed the CBI to specifically investigate the role of bank officials who were in charge when these massive loans were sanctioned and released.
The Court observed that such a large-scale fraud could potentially involve "insider help" or collusion. "It is imperative for CBI to probe the conduct of bank officials to check if funds were released with the collusion of bank officers," the order stated.
The Bench directed the CBI to look into the "nexus, collusion, and conspiracy" to see if the funds were intentionally diverted with the knowledge of the lenders.
The core of the dispute lies in how the money disappeared. According to the petition, RCOM and its subsidiaries (Reliance Infratel and Reliance Telecom) received loans worth ₹31,580 crore between 2013 and 2017 from a consortium of banks led by the State Bank of India (SBI).
A forensic audit later revealed:
- Diversion of Funds: Money meant for business operations was allegedly used to repay unrelated loans.
- Circular Routing: Funds were allegedly moved through a complex web of companies to disguise the "evergreening" of loans (taking new loans to pay old ones).
- Liquidation of Assets: Investments in mutual funds and fixed deposits were reportedly liquidated immediately after being created.
While Advocate Prashant Bhushan, appearing for the petitioner, called it the "largest corporate fraud" and argued that the "kingpin" had not been arrested, Anil Ambani’s counsel argued that this was a case of business failure, not crime.