BoI classifies Reliance Communications loan accounts as fraud

Reliance Communications Limited (RCOM) has disclosed that Bank of India has classified the loan accounts of RCOM, its subsidiary Reliance Telecom Limited (RTL), and several former directors as “fraud”. The classification is based on a forensic audit that found a diversion of funds and other non-compliance issues.

RCOM, in a letter to the stock exchanges dated August 23, 2025, stated that it received two letters from Bank of India on August 22, 2025, which conveyed the decision. The bank’s action follows a forensic audit conducted by BDO India LLP. The audit report highlighted the diversion of Rs 350-crore loan, which was meant for operational expenditures but was instead invested in a fixed deposit. The audit concluded that this use of funds was a “non-compliance with sanction terms of the loan”.

The bank’s decision to classify the accounts as fraud also applies to individuals associated with the companies, including RCOM’s erstwhile directors and promoter Anil Dhirajlal Ambani and Manjari Ashok Kacker. Additionally, RTL’s former director, Grace Thomas, and several other individuals were also implicated. According to the document, the total outstanding loan amount for RCOM as of 7 August 2025, was Rs 724.78 crore.

In its disclosure, Reliance Communications has contested the bank’s fraud classification, arguing that it is not legally tenable due to the ongoing Corporate Insolvency Resolution Process (CIRP). RCOM’s resolution professional has cited Section 14(1)(a) of the Insolvency and Bankruptcy Code (IBC), 2016, which imposes a moratorium on proceedings against a company undergoing CIRP. The company further noted that a resolution plan has already been approved by 100% of the committee of creditors, including Bank of India, and is currently pending approval from the National Company Law Tribunal (NCLT).

RCOM’s communication asserts that upon NCLT approval of the resolution plan, the company and RTL will have “immunity against any liability for any purported offences committed… prior to the commencement of the CIRP”. The company’s resolution professional has also filed avoidance applications with the NCLT related to the transactions identified in the forensic audit. The company stated that it is seeking legal advice on the matter.

Anil Ambani has categorically denied all allegations and charges and shall pursue remedies available to him in accordance with legal advice.

A spokesperson on behalf of Anil Ambani said that the action by Bank of India to classify the loan account of Reliance Communications Limited (RCom) along with Anil Ambani, pertains to matter dating back more than 10 years, as per disclosures and records available in the public domain.

“It is pertinent to note that Anil Ambani served only as a Non-Executive Director on the Board of RCom and resigned from this position in 2019, over six years ago. He had no role whatsoever in the day-to-day operations or decision-making of the company. However, Mr. Ambani is being selectively singled out,” said the spokesperson.

He further said that while a Show Cause Notice was issued to Ambani, the requisite documents were not furnished to him. Bank of India further deprived him of the opportunity of a personal hearing in the matter, he added.

“These actions are contrary to the RBI regulations issued in July 2024, as well as to well-established law and the judgments of the Hon’ble Supreme Court and the Hon’ble Bombay High Court,” he further said.

As per the company, Bank of India, after issuing a Show Cause Notice to 13 Directors and Key Managerial Personnel (KMPs) of RCom, unilaterally withdrew the same against all others. However, it selectively continued the proceedings against Anil Ambani without following the principles of natural justice.

Also See: Reliance Group’s response to ED action against Anil Ambani in Yes Bank loan fraud case