The Central Bureau of Investigation (CBI) has initiated an investigation into alleged losses of over 1816.22 crore rupees to the Employees' Provident Fund Organisation (EPFO).
An FIR was registered against Reliance Capital Limited (RCL) and its former chairman, Anil D. Ambani.
According to officials, this action followed a complaint filed by the Ministry of Labour and Employment of the Union on July 21. This complaint alleged commission of crimes including fraud, criminal conspiracy, and causing illegal damage to the EPFO.
The complaint indicated that the losses arose from EPFO's investments in Non-Convertible Debentures issued by Reliance Capital Limited, as well as from the discovery of materials suggesting fraudulent activities related to these investments.
In response to the complaint, Ambani's representative stated that the CBI FIR pertains exclusively to Reliance Capital Limited. He clarified that Anil Ambani served as a non-executive director/chairman of RCL from 2005 until November 2021, when the company's Board of Directors was replaced by the Reserve Bank of India, which appointed an administrator.
The representative also emphasized that Anil Ambani denies any wrongdoing and reserves all legal rights.
According to the complaint, which is now part of the CBI FIR, RCL issued Non-Convertible Debentures (NCDs) during 2013 and 2014. Based on this, portfolio managers invested a total of 2500 crore rupees on behalf of the EPFO in the aforementioned NCDs, which were due for maturity in 2023 and 2024.
The Ministry of Labour and Employment submitted the complaint after the Enforcement Directorate (ED) reported discovering documentary evidence, and an audit of transactions conducted by BDO India LLP showed signs of fraudulent operations by RCL and its management personnel between December 7, 2019, and December 6, 2021.
The complaint also alleged that various fraudulent operations had previously been identified, leading to the collapse of RCL due to misappropriation of company funds.
It was stated that the ED's investigation preliminarily pointed to a series of transactions involving irregular lending, diversion of funds, deterioration of collateral, and other actions by RCL requiring scrutiny. The complaint concluded that if such behavior is proven during the investigation, it could have significantly contributed to the financial deterioration of RCL, its inability to meet obligations to bondholders, and the subsequent loss to EPFO amounting to 1816.22 crore rupees.
