The CBI has registered an FIR against Reliance Capital Limited (RCL) and its former chairman Anil D Ambani for allegedly causing a loss of Rs 1,816.22 crore to the EPFO, officials said on Saturday.Ambani, however, denied any wrongdoing, according to a statement issued by his spokesperson.
The action follows a July 21 complaint from the Union Ministry of Labour and Employment alleging commission of offences of cheating, criminal conspiracy and causing wrongful loss to the Employees’ Provident Fund Organisation (EPFO), the officials said.
“The present complaint is being lodged on behalf of EPFO through its authorised officer pursuant to the approval of the competent authority in relation to the 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of the Board of Reliance Capital Limited from 2005 until November 2021, when the Reserve Bank of India superseded the Board of Directors of the company and appointed an administrator.”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.
According to the complaint, which is now part of the CBI FIR, during 2013 and 2014, RCL issued secured Non-Convertible Debentures (NCDs).
Pursuant thereto, investments aggregating to Rs 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 sent the complaint after it was intimated by the Enforcement Directorate (ED) that it had found documentary evidence and a transaction audit conducted by BDO India LLP showed prima facie a number of fraudulent transactions by RCL and the persons 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 Rs 1,816.22 crore suffered by EPFO,” the complaint alleged.