A Delhi court on Thursday sent former senior executives of Reliance Anil Ambani Group (RAAG) Amitabh Jhunjhunwala and Amit Bapna to five days of ED custody in an alleged bank loan fraud-linked money laundering case.
The 24-page order stated the ED found that loan funds were allegedly siphoned to shell companies that the group itself “controlled”.
The order added that the digital evidence recovered by the Enforcement Directorate during the probe — in the form of emails — “crystalises” the role of the two arrested accused in siphoning loan funds worth crores of rupees.
The federal probe agency arrested the two on Thursday under the Prevention of Money Laundering Act (PMLA) in an alleged bank loan fraud involving Reliance Home Finance Limited (RHFL) and Reliance Commercial Finance Ltd (RCFL).
“…Taking into consideration the totality of facts and circumstances, five days custodial remand is granted to the Enforcement Directorate and the accused shall be produced before the concerned court on 20.04.206,” special judge Hasan Anzar (Rouse Avenue District Court) said in his order.
Jhunjhunwala, 70, served as the group managing director of the Reliance Group as well as vice chairman and director of Reliance Capital Limited (RCL), the parent company of RHFL and RCFL.
Bapna served as the chief financial officer of RCL and director of RHFL.
The two Reliance Group companies allegedly defaulted on their loan amounts and the unrecoverable amount – quantified as proceeds of crime under the anti-money laundering law – totals over ₹11,000 crore, according to the order.
The court said that the “digital trail” of emails and other material, which the ED relied upon for the arrests, “clearly shows” that both accused persons played a role in siphoning/diverting funds to various entities and were “party” to various decisions.
“The nature of digital material/evidence in the form of email exchanges further crystalise the role of both the accused…” it said.
The court said that the ED has been “able to demonstrate” that after taking loans from various entities, the funds were disbursed to various “shell” (dummy) companies, and so far as the investigation has disclosed, that such entities were “under the control of” Reliance Anil Ambani Group.
Jhunjhunwala’s lawyer told the court that the agency failed to investigate the mention of “ADA” in a 2017 email his client sent to his “higher ups” such as Anil Ambani, Lalit Jalan etc., as “each and every” instruction was given by ADA and the top management which he “passed on” downwards.
The court noted the contention of the two former executives in its order, stating that the “relied upon” emails indicated that the “business decision was on the advice and direction of the top management to whom various mails were also marked.”
The court said a perusal of two emails from 2018 and 2019 indicates that (loan) funds were disbursed to some entities on the “very same day” and the loan account numbers became NPA (non-performing asset).
“Interestingly, the email dated 27.02.2019 from Bapna to Jhunjhunwala would cleary reveal that accused Bapna would update Jhunjhunwala about various shell companies alongwith its name, date and other financial indicators,” the order stated.