The Central Bureau of Investigation (CBI) has initiated a probe against Reliance Capital Ltd (RCL) and its former chairman, Anil D. Ambani. The investigation stems from allegations that the company caused a significant loss of ₹1,816.22 crore to the Employees' Provident Fund Organisation (EPFO) through investments in its non-convertible debentures (NCDs).
Origin of the Allegations
The case was triggered by a complaint filed on July 21 by the Union Ministry of Labour and Employment. The ministry's complaint outlines alleged offenses of cheating, criminal conspiracy, and causing wrongful loss to the EPFO.
According to the complaint, Reliance Capital issued secured NCDs between 2013 and 2014. Subsequently, portfolio managers invested approximately ₹2,500 crore of EPFO funds into these debentures, which were slated to mature in 2023 and 2024. The ministry contends that the EPFO ultimately incurred a substantial loss of ₹1,816.22 crore on these investments.
"The present complaint is being lodged on behalf of EPFO through its authorised officer pursuant to the approval of the competent authority in relation to the substantial loss suffered by the EPFO arising out of its investment in the secured Non-Convertible Debentures issued by Reliance Capital Limited and the subsequently discovered material indicating fraudulent conduct connected with such investment," the complaint stated.
What Prompted the CBI FIR?
The Labour Ministry's decision to file the complaint came after receiving information from the Enforcement Directorate (ED). The ED had reportedly uncovered documentary evidence, alongside a transaction audit conducted by BDO India LLP, suggesting prima facie fraudulent transactions involving Reliance Capital and its management between December 7, 2019, and December 6, 2021.
The complaint further suggests that fraudulent activities may have occurred in earlier periods, contributing to Reliance Capital's eventual financial collapse through the alleged siphoning of company funds. The ED's findings also highlighted alleged irregular lending, diversion of funds, impairment of security, and other transactions necessitating further investigation.
Anil Ambani's Response
In response to the FIR, a spokesperson for Anil Ambani stated that the case pertains to Reliance Capital Ltd. Ambani served as a Non-Executive Director and Chairman of the company's board from 2005 until November 2021, when the Reserve Bank of India superseded the board and appointed an administrator. "Anil Ambani denies any wrongdoing whatsoever, and reserves all rights available to him in law," the spokesperson affirmed.