ED Raids Anil Ambani’s Reliance Group: In a major crackdown, the Enforcement Directorate (ED) conducted extensive search operations across 35 locations linked to Anil Ambani’s Reliance Anil Dhirubhai Ambani Group (RAAGA) over alleged ₹3,000 crore money laundering. Preliminary investigations indicate that massive loans from Yes Bank, disbursed between 2017 and 2019, were diverted illegally through fraudulent channels.
ED Raids Over 50 Companies and 25 Individuals
The operation, conducted under Section 17 of the Prevention of Money Laundering Act (PMLA), involved raids on 50 companies and more than 25 individuals connected with the case. According to ED officials, the raids were carried out based on FIRs previously registered by the Central Bureau of Investigation (CBI) and intelligence shared by regulatory bodies such as SEBI, National Housing Bank (NHB), National Financial Reporting Authority (NFRA), and Bank of Baroda.
Illegal Diversion of Public Money
The ED has unearthed evidence of a well-orchestrated financial fraud, where public funds were allegedly misappropriated, cheating banks, shareholders, and other financial institutions. The probe has also revealed possible quid pro quo arrangements, as entities linked to Yes Bank’s promoters received significant financial transfers just before loans were sanctioned.
“Gross violations have been found in the loan approval process. Credit Approval Memorandums (CAMs) were backdated, and investments were proposed without proper due diligence, violating Yes Bank’s credit policy,” said a senior ED official.
Key Red Flags Identified by ED
The investigation highlights several major red flags in the loan disbursement process:
- Loans granted to financially weak shell companies.
- Backdated CAMs and misrepresentation of financial statements.
- Borrowers with common addresses and directors, pointing to circular financing.
- Diversion of funds to promoter-linked entities.
- Evergreening of loans to hide defaults.
- Disbursal of loans before official approval.
- Lack of documentation and credit assessment.
SEBI Flags Irregularities in Reliance Home Finance Ltd
The Securities and Exchange Board of India (SEBI) has provided crucial inputs to ED regarding Reliance Home Finance Ltd (RHFL). Notably, RHFL’s corporate loan book surged from ₹3,742.60 crore in FY 2017–18 to ₹8,670.80 crore in FY 2018–19. ED is currently examining irregular loan approvals, process deviations, and suspicious fund flows.
What Lies Ahead?
The ED’s crackdown on RAAGA companies marks a significant step in its ongoing efforts to curb large-scale financial fraud. Investigators are expected to issue summons to key executives and scrutinize Yes Bank’s loan approval policies during the period in question.