The Central Bureau of Investigation (CBI) has filed an FIR against Reliance Capital Limited (RCL) and its former chairman Anil D Ambani in connection with an alleged loss of ₹1,816.22 crore to the EPFO, officials said on Saturday.
Ambani, however, denied any wrongdoing, news agency PTI reported, citing a statement issued by his spokesperson.
The action comes shortly after the Union Ministry of Labour and Employment lodged a complaint on July 21, alleging that the named parties committed offences of cheating, criminal conspiracy and caused wrongful loss to the Employees’ Provident Fund Organisation (EPFO), the officials said.
EPFO cites losses from debenture investment
The complaint was filed on behalf of the EPFO through its authorised officer after approval from the competent authority. It alleged that the retirement body suffered a substantial loss from its investment in secured non-convertible debentures (NCDs) issued by Reliance Capital Ltd.
It further stated that material discovered later pointed to suspected fraudulent conduct linked to the investment, which prompted the filing of the case.
“…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 alleged.
Responding to the complaint, Ambani’s spokesperson said, “The FIR registered by the CBI pertains to Reliance Capital Limited. Mr. Ambani served as a Non-Executive Director/Chairman of the Board of Reliance Capital Limited from 2005 until November 2021, when the Reserve Bank of India superseded the Board of Directors of the company and appointed an administrator.”
“Anil Ambani denies any wrongdoing, whatsoever, and reserves all rights available to him in law,” the spokesperson said.
EPFO invested ₹2,500 crore in Reliance Capital NCDs
According to the complaint, which is now part of the CBI FIR, Reliance Capital Ltd. issued secured non-convertible debentures (NCDs) during 2013 and 2014.
Pursuant thereto, investments aggregating to ₹2,500 crore were made by the portfolio managers on behalf of the EPFO in the aforesaid NCDs, with maturity in 2023 and 2024, the complaint alleged.
The Ministry of Labour and Employment forwarded the complaint after being informed by the Enforcement Directorate (ED) that it had found documentary evidence related to the matter. It also cited a transaction audit conducted by BDO India LLP, which reportedly showed prima facie evidence of several fraudulent transactions by RCL and those in charge of its management during the period from December 7, 2019, to December 6, 2021.
“In addition, during an earlier period as well, various fraudulent transactions have been found which also led to ultimate failure of RCL as a consequence of siphoning off of money of RCL,” the complaint alleged.
It claimed that the ED probe prima facie indicated a series of transactions involving irregular lending, diversion of funds, impairment of security and other acts by RCL that require investigation.
“If established upon investigation, such conduct may have materially contributed to the financial deterioration of RCL, its inability to honour its obligation towards Debenture Holders, and the consequent loss of ₹1,816.22 crore suffered by EPFO,” the complaint alleged.
(With inputs from PTI)
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