Key Points
- Over 35 premises and 50 companies linked to Anil Ambani’s Reliance (ADAG) Group raided by the Enforcement Directorate.
- Loans of around ₹3,000 crore sanctioned by Yes Bank from 2017–2019 under investigation for alleged diversion to shell entities.
- Evidence of bribes paid to Yes Bank officials and promoters surfaced.
- Multiple agencies, including the CBI, SEBI, and National Housing Bank, have contributed intelligence to the probe.
- Authorities flag “systematic manipulation,” use of fake firms, and severe violations in loan approval processes.
Mumbai: The Enforcement Directorate (ED) launched simultaneous search operations at 35+ locations, targeting over 50 firms connected to Anil Ambani’s Reliance Group (also known as RAAGA companies) in Mumbai, Delhi, and other cities. The crackdown follows two FIRs filed by the CBI concerning suspicious Yes Bank loans and other financial irregularities.
Suspected Nature of the Fraud
- Loan Diversion: Loans worth approximately ₹3,000 crore, sanctioned by Yes Bank to RAAGA companies between 2017 and 2019, were allegedly routed to shell entities and related party companies, violating lending norms and agreements.
- Bribery and Quid Pro Quo: Just before these loan sanctions, Yes Bank promoters and key officials purportedly received significant sums in their personal accounts, suggesting a bribe-for-loan nexus.
- Manipulated Processes: The ED flagged “gross violations” such as backdated Credit Approval Memorandums (CAMs), loans given without adequate credit analysis or documentation, and loans disbursed on or before the application date.
Key Findings & Red Flags
- Loans frequently issued to financially unstable or fake companies with common directors and shared addresses.
- Evergreening of Loans: Some loans were allegedly used to service prior debts, while new loans were sanctioned on the same dates as application or even before formal bank approvals.
- Misrepresentation & Lack of Due Diligence: Investigations reveal misrepresented financials, skipped due diligence, and missing loan documents.
- Shell Companies: Many borrower firms operated as mere fronts designed to facilitate fund diversion.
- The probe includes worrying spikes in the loan book of Reliance Home Finance Ltd (an Ambani group company), with its portfolio more than doubling between FY2018 and FY2019, now flagged by SEBI for scrutiny.
Agencies Involved & Next Steps
Investigative bodies CBI, SEBI, the National Housing Bank, National Financial Reporting Authority (NFRA), and Bank of Baroda have all provided intelligence and findings to the ED. The State Bank of India also recently classified Reliance Communications (another Anil Ambani entity) as a fraud account and is preparing complaints to the CBI and RBI.
The ED, under the Prevention of Money Laundering Act, continues interrogations and evidence collection, with administrative and criminal actions expected based on the widening investigation.
Table: Core Allegations and ED Findings
| Allegation | Details |
|---|---|
| Loan Amount Under Scanner | ~₹3,000 crore |
| Period of Suspected Fraud | 2017–2019 |
| Bribes/Quid Pro Quo Alleged | Payments to Yes Bank promoters before loan sanctions |
| Key Loan Violations | Backdated CAMs, no credit analysis, improper documentation |
| Use of Fake/Shell Companies | Funds diverted into entities with common directors/addresses |
| Regulatory Inputs | SEBI, NHB, NFRA, Bank of Baroda, SBI, CBI |
| Evergreening Practice Alleged | Loans used to repay earlier loans; fresh disbursal on old defaults |
| Severity of the Probe | Multi-agency, nationwide, ongoing criminal and regulatory action |
What’s Next?
The ED is intensifying its investigation, with further searches and interrogations likely. Regulatory and criminal actions could be forthcoming against RAAGA companies, Yes Bank executives/promoters, and other implicated intermediaries. The unfolding probe is set to have far-reaching ramifications for Anil Ambani, his Reliance Group, and stakeholders in India’s financial sector.
