Bank of Baroda declares Anil Ambani's loan accounts as 'fraudulent'; Important move

Bank of Baroda has classified the loan accounts of prominent industrialist Anil Ambani as fraudulent. The move by Bank of Baroda, one of the country's leading public sector banks, against Anil Ambani, who is the director of Reliance Communications Limited and RCom, is significant.

The loans taken before Reliance Communications Limited entered into insolvency proceedings have been classified as fraudulent. Reliance Communications Limited, which is currently in insolvency proceedings under the Insolvency and Bankruptcy Code of 2016, has clarified that the loans currently classified as fraudulent relate to the period before the insolvency proceedings. Therefore, the company has already clarified its position that these should be resolved through repayment of debt or other arrangements.

Reliance Communications Limited is currently being managed by resolution professional Anish Niranjan Nanavati. Anil Ambani was removed from the post of director of this institution. The committee formed to resolve the debt of Reliance Communications Limited is awaiting the approval of the National Company Law Tribunal.

In the unexpected move of the bank, Reliance Communications Limited has sought legal assistance. Reliance Communications Limited explains that it is protected from legal arguments, proceedings, judgments, orders, courts, tribunals, or arbitration panels as the insolvency proceedings are progressing. The unexpected move by Bank of Baroda comes amid an ED investigation related to the alleged loan fraud against Anil Ambani's group entities.

The ED has sought information from about 13 banks regarding loans given to Reliance Housing Finance, RCom and Reliance Commercial Finance. It is estimated that a loan fraud of Rs 17,000 crore has taken place. Reliance Communication Limited is headquartered in Navi Mumbai. The country's largest bank, SBI, had included the loan accounts of Reliance Communication Limited as fraudulent in June. Bank of India had also taken similar action in August last year. Earlier, Anil Ambani appeared before the Enforcement Directorate in a money laundering case related to a bank loan fraud of Rs 17,000 crore.