SC pulls up ED, CBI over delay in Anil Ambani-led RCOM loan fraud probe

New Delhi: The Supreme Court on Wednesday expressed serious concern over an “unexplained delay” by the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI) in probing alleged large-scale bank loan frauds linked to Reliance Communications Ltd (RCOM), its group companies, and promoter Anil Ambani, involving public funds estimated at Rs 40,000 crore.

A Bench headed by Chief Justice of India (CJI) Surya Kant asked the ED to constitute a Special Investigation Team (SIT) of senior officers and directed both Central agencies to take the ongoing investigation to its “logical conclusion” in a time-bound manner.

During the hearing, senior advocate Mukul Rohatgi, appearing on behalf of Reliance Group chairman Anil Ambani, gave an undertaking that his client would not leave the country without prior permission of the apex court. The assurance was given amid apprehensions expressed during the hearing that the key accused could flee India before completion of the probe.

While clarifying that it was not passing any coercive or harsh orders at this stage, the Bench, also comprising Justices Joymalya Bagchi and Vipul M. Pancholi, observed that the magnitude of the alleged siphoning of public funds warranted a time-bound investigation.

“We expect that the agencies must act independently and swiftly. Today, we are not passing any harsh order,” the apex court said, directing the ED and the CBI to file detailed status reports within four weeks on the progress of their investigations.

Taking note of a sealed-cover report filed by the CBI, the CJI Kant-led Bench was informed that a formal FIR had been registered on the basis of a complaint from the State Bank of India (SBI), and that similar accounts in other banks were also under scrutiny.

However, the apex court questioned why only a single FIR had been registered despite complaints from multiple lenders, observing that each complaint constitutes a separate transaction warranting independent examination.

The Supreme Court also directed the CBI to probe the conduct of bank officials to ascertain whether financial facilities were released with any nexus, connivance or conspiracy involving banks, public officials and the accused entities.

Appearing for the ED and the CBI, Solicitor General Tushar Mehta submitted that the ED had already found material indicating forged bank guarantees, that an ECIR had been registered against RCOM, and that investments made by Yes Bank in 2017 in Reliance Commercial Finance Ltd (RCFL) and Reliance Home Finance Ltd (RHFL) were under examination.

Advocate Prashant Bhushan, appearing for the petitioner, contended that despite the enormity of the alleged fraud, the “kingpin” is yet to be arrested.

He argued that the scale of alleged siphoning, running into tens of thousands of crores, demands robust, independent and expeditious action. On the other hand, senior advocate Rohatgi denied allegations of siphoning and submitted that Anil Ambani's Reliance Group has been making continuous efforts to repay its dues and that genuine business defaults should not be criminalised.

The hearing took place against the backdrop of recent action by the ED under the Prevention of Money Laundering Act (PMLA), which has provisionally attached assets worth about Rs 1,885 crore belonging to Anil Ambani’s Reliance Group in connection with the RCOM, RCFL, RHFL and Yes Bank fraud cases, taking the cumulative attachment in the group cases to nearly Rs 12,000 crore.

Last week, the ED also arrested former RCOM director Punit Garg, accusing him of diverting illicit funds to offshore firms and personal expenses. The Supreme Court said the matter would be taken up after four weeks, once the status reports from the ED and the CBI are placed before it.