ED crackdown on Anil Ambani: 40 assets worth Rs 3,084 crore attached in laundering probe

Mumbai: The Enforcement Directorate (ED) has attached assets worth more than Rs 3,000 crore linked to Reliance Group Chairman Anil Ambani, his group companies and linked entities as part of a money laundering investigation, official sources said on Monday.

The federal probe agency issued four provisional orders under the Prevention of Money Laundering Act (PMLA) on October 31 for attaching the properties, including the 66-year-old Ambani's family home in Pali Hill, Mumbai, apart from other residential and commercial properties of his group companies, they said.

A plot of land belonging to the Reliance Centre on Maharaja Ranjit Singh Marg in Delhi and multiple other assets of Reliance Infrastructure Ltd., certain linked entities in the national capital, Noida, Ghaziabad, Mumbai, Pune, Thane, Hyderabad, Chennai and East Godavari have also been attached.

Offices in the 'Nagin Mahal' building at Churchgate in Mumbai, flats in BHA Millenium apartments in Noida and Camus Capri Apartments in Hyderabad are among those provisionally attached by the ED.

According to the sources, the total value of the attached assets is Rs 3,084 crore.

There was no immediate response from Ambani or his group on the ED action.

The case pertains to alleged diversion and laundering of public funds raised by Reliance Home Finance Ltd. (RHFL) and Reliance Commercial Finance Ltd. (RCFL).

During 2017-2019, Yes Bank invested Rs 2,965 crore in RHFL instruments and Rs 2,045 crore in RCFL instruments.

These turned into "non-performing" investments by December 2019, with Rs 1,353.50 crore then outstanding for RHFL and Rs 1,984 crore for RCFL, according to the ED.

The agency, according to the officials, said the investigation found that "direct" investment by the erstwhile Reliance Nippon Mutual Fund into Anil Ambani Group financial companies was "not legally possible" due to SEBI's mutual fund conflict of interest framework.

In violation of these guidelines, the money invested by the general public in the mutual fund was routed indirectly through Yes Bank exposures, which ultimately landed with Anil Ambani Group companies, they alleged.

The ED said its investigation showed that funds were routed "indirectly" through Yes Bank's exposures to RHFL and RCFL, while the two companies extended loans to entities linked to the Reliance Anil Ambani Group.

"Substantial portions of corporate loans (General Purpose Corporate Loans) ultimately landed in accounts of Reliance group companies. While extending these loans, serious control failures were found by the ED," the agency said.

The loans to the linked companies of the group were processed fast without core prudential checks. Many loans were processed on the same day as application, sanction and agreement, and in some cases, disbursal preceded sanction, they claimed.

The ED, according to the officials, has also "intensified" the probe into Reliance Communications Ltd. (RCOM) and related companies' loan "fraud".

These companies are alleged to have "diverted" over Rs 13,600 crore used in evergreening loans. Over Rs 12,600 crore was diverted to connected parties and over Rs 1,800 crore was invested in fixed deposits and mutual funds etc., which was substantially liquidated for "re-routing" to group entities, according to the ED probe.

The officials said the agency was continuing to trace "proceeds of crime" and secure attachments of property so that they can later be restituted to the affected banks according to a provision under the PMLA.

The action against Ambani pertains to alleged financial irregularities and collective loan "diversion" pegged at more than Rs 17,000 crore by multiple group companies, including Reliance Infrastructure.

The businessman was questioned in the case by the ED in August.

This came after the agency searched 35 premises of 50 companies and 25 people, including executives of his business group, in Mumbai on July 24.

The ED's money laundering case stems from a Central Bureau of Investigation FIR.