The Ledger Of Lies

New Delhi (30 October, 2025): In an investigation, Cobrapost has unearthed a massive banking fraud amounting to more than Rs. 28,874 crore that the Reliance Anil Dhirubhai Ambani Group, or ADA Group, promoted by Anil Ambani and his family members, has indulged in since 2006 with impunity. The fraud involves siphoning off funds from  listed ADA Group companies. The source of the funds was bank loans, IPO money, and money raised from bonds.

In addition, about US$ 1535 million raised abroad was routed to India in a fraudulent manner. This includes US$ 750 million a mysterious benefactor company, NexGen Capital, advanced to Emerging Market Investments & Trading Pte (EMITS) of Singapore during a temporary custody arrangement with Reliance Innoventures, the holding company of the ADA Group. The entire sum of US$ 750 million was routed to India and made to disappear, so were the subsidiaries through which diversion of funds was effected to Reliance Innoventures, the holding company of the ADA Group, an activity which can potentially classify as money laundering. Similarly, US$ 785 million, raised in external commercial borrowings, found its way into various ADA Group companies, taking the total to US$ 1535 million.  

The ADA Group companies and their key management personnel have committed the fraud in flagrant violation of various laws such as the Companies Act of 2013, Foreign Exchange Management Act (FEMA), the Prevention of Money Laundering Act (PMLA), Securities and Exchange Board of India (SEBI) Act, and the Income Tax Act, among others. The value of US$ 1535 million thus diverted works out to Rs. 13047.50 crore in Indian currency at an average exchange rate of Rs. 85 against one dollar. Put together, the amounts involved stand at more than Rs. 41,921.57 crore.

Our investigation is based on a thorough analysis of multiple official and public third-party sources. These include statutory orders, regulatory filings and documents published by the Ministry of Corporate Affairs, the Securities and Exchange Board of India (SEBI), the National Company Law Tribunal (NCLT), and the Reserve Bank of India; court orders; documents filed in foreign jurisdiction; and information available in public domain. We have been as meticulous and diligent as possible in extracting, collating, interpreting and verifying the data from all these sources.     

It will be in order to recall that Anil Ambani had sought indulgences like buying a US$ 20 million luxury yacht as far back as 2008 and gifted it to his spouse Tina. The prized acquisition created an unprecedented media hype around the event. However, the yacht was bought using funds from Reliance Communication, a listed entity.

There are many such instances of diversion of funds which the Cobrapost investigation has catalogued. The companies involved are Reliance Communication, Reliance Capital, Reliance Home Finance Ltd., Reliance Commercial Finance Ltd., and Reliance Corporate Advisory Services Ltd. We have identified dozens of subsidiaries and shell entities both offshore and inland, which are involved in this fraud. All these instances show how all managerial cautions, fiscal prudence and rules of corporate governance were thrown to dustbin by these ADA Group companies and their key management personnel.

There is no surprise then that all the six major ADA Group companies, investigated in the story, found themselves in the red, while duping the lender banks and pauperizing millions of investors across the country in the process.

We have also unearthed how some of the entities involved in the fraud were rechristened many times and merged with either the promoter-group entities or made to disappear to cover the tracks and conceal the identity of the ultimate beneficiary of what emerges as an elaborate schematic of deception.

The modus operandi, as the findings of the Cobrapost investigation reveal, the ADA Group companies deployed included the use of dozens of pass-through entities, Special Purpose Vehicles (SPVs), subsidiaries, shell companies or offshore entities based in the British Virgin Islands (BVI), Cyprus, Mauritius, the United States, the United Kingdom  and Singapore, to route funds to Reliance Innoventures, the main holding company of the group and other promoter-group companies. This was done by way of granting loans to subsidiaries and allotment of debentures and preference shares and siphon off those funds using SPVs or  shell entities and then writing off the loans.

This way the ADA Group companies siphoned off Rs. 28,874.07 crore, even as US$ 1535 million was routed to India in a dodgy manner to route the funds again to various shell entities both offshore and Indian.

Here is how we sum up our findings:

• In one of the first instances of fraudulent diversion of funds, which goes as far back as 2008 Anil Ambani bought a luxury yacht for his spouse. The yacht was bought for about US$ 20 million from abroad through Reliance Transport & Travels Pvt. Ltd., an ADA Group subsidiary. This was done in a circuitous manner with layers added at each step to camouflage the diversion. 

The modus operandi deployed for the acquisition was as follows:

• First, the yacht was chartered through a Jersey-based company, Ammolite Holdings Limited, for US$ 4,00,000. In the second step, funds were moved from Reliance Communication to Reliance Transport & Travels for a complete buyout. In the third step, payment was advanced directly to Ferretti SPA of Italy upon advice from Ammolite Holdings.
• However, the funds were diverted from RCOM in the form of a loan to Reliance Transport & Travels through Gateway Net Trading for the purchase of 10 million handsets. Ammolite Holdings was supposed to supply these handsets, though it had no experience to play a trader.
• Instead, the entire fund was used to acquire the yacht from Ferretti SPA of Italy.
• After the acquisition was complete, Reliance Capital which owned a 50 percent stake in Ammolite Holdings, wrote off the equity investment it had made in Ammolite Holdings.

• In another similar instance, Reliance Infrastructure, along with Reliance Capital, Reliance Home Finance, and Reliance Commercial Finance, diverted Rs. 14,529.18 crore to both offshore and Indian entities. The funds were funnelled back to ADA Group promoter companies though Edico Ventures, a promoter-group company, after which the entities involved were merged.

Here is how the funds were moved:

• A special purpose vehicle by the name of CLE Pvt. Ltd. was used for fund extraction from Reliance Infrastructure, Reliance Capital, Reliance Home Finance and Reliance Commercial Finance in the form of debentures.
• CLE Pvt. Ltd. changed its name at least half a dozen times to camouflage the fraudulent diversion of funds and the ultimate beneficiary or recipient of the diverted funds.
• Rs. 10,049 crore was sourced from Reliance Infrastructure, while Reliance Capital and Reliance Commercial Finance contributed, respectively, Rs. 3270 crore and Rs. 286 crore. The rest Rs. 800 crore was sourced from Yes Bank.
• After the extraction of these funds into CLE Pvt. Ltd., they were diverted in the form of debentures and advances to promoter linked and shell entities at a huge premium.
• From these entities funds were moved abroad and to other domestic companies.
• Subsequently, after diversion of funds these entities were merged with a company called Edico Ventures to obscure the trail.
• Cobrapost has also identified 26 offshore entities which are among the beneficiary companies and to some of which funds were remitted by ADAG shell companies. The locations of at least 14 of these 26 offshore shell entities have also been found:

• Tanzanite Holdings Limited, Batiste Unlimited, Radium Unlimited, and Hui Investment Unlimited are located in Jersey, an island among the British Virgin Islands;
• Reindeer Holdings Limited, Atthery Assets Limited, Tonite Holdings Limited, Lawson Investing Limited, and Reliance Infra Projects International Limited are located in the British Virgin Islands;
• AAA Enterprises and Ventures, Ikosel investments Limited, Kemigton Enterprises Limited, karhula  Enterprises Limited, and Dornsen investments Limited are located in Cyprus.
• These shell entities received monies from ADA Group companies like Edico Ventures, Reliance Innoventures, and Reliance Inceptum, among others.

• The details of diversion of funds by Reliance Home Finance Ltd., Reliance Commercial Finance Ltd., and Corporate Advisory Services, all subsidiaries of Reliance Capital, are provided next: 

• Reliance Home Finance Ltd. siphoned off Rs. 7965 crore by advancing loans to 49 entities.

• The entire loaned sum of Rs. 7965 crore found its way back into the coffers of 14 ADA Group companies, the ultimate beneficiaries of this fraud.
• The source of these diverted funds disbursed to 49 entities was loans the company had secured from various public sector banks.
• These loans became non-performing assets and the company was acquired by Authum Investment & Infrastructure Ltd. through the CIRP process before the NCLT, which has started invoking securities to recover those loans. This should have been done by the lender banks in the first place. 

• Reliance Commercial Finance Limited diverted Rs. 4979.89 crore in a similar manner.

• These funds were diverted through 27 entities in the form of loans.
• Many of these companies had also received loans from Reliance Home Finance.
• These funds were then routed to promoter-group companies directly or through intermediary entities. 

• Reliance Corporate Advisory Services diverted Rs. 1400 crore through inter-corporate loans which carried no interest.

• Loans were advanced from holding company Reliance Capital to Reliance Corporate Advisory Services.
• Reliance Corporate Advisory Services used these borrowed funds to grant loans downstream or make investment in various companies to finally plough back the money in companies personally controlled by ADA Group promoters.
• In most cases, the loan was granted to promoter-group companies of various groups like Yes Bank (Rana Kapur), with prime focus on Vasu Bhagnani, Indiabulls and Wadhawan-controlled DHFL, among others.
• In consideration of these loans and investments, promoter companies of ADA Group received kickbacks from these recipient companies. These transactions are part of the ongoing ED probe.
• The value of transactions involved is Rs. 1400 crore. This was typically an exercise in siphoning off the funds from the company and hiding the blatant fraud from regulatory agencies, auditors and stakeholders to avoid the scrutiny for related party transactions. 

• Cobropost investigation further shows that Reliance Home Finance and Reliance Commercial Finance together extended a sum of Rs. 288 crore in loan/investment to Wadhawan Holdings, a company owned by Wadhawan brothers of Dewan Housing Finance Ltd. In turn, loans worth Rs. 1285 crore were secured in seven of the personally controlled companies of Anil Ambani. The loans were never repaid.
• Cobrapost has also unearthed activities which potentially classify as money laundering under the PMLA. Some of them are also in contravention of FEMA. The ADA Group companies have been found indulging in such activities since 2006, resulting in diversion of US$ 1.53 billion to India in an unlawful manner.
• As already mentioned in the beginning, US$ 750 million was routed to India for the still-born Dadri power project. A multilayered web of companies was created around 2007 by the ADA Group for the purpose which makes it a case of potential money laundering. This is what we found:

• This was done through a company called Reliance Projects Pte Limited, set up in Singapore on July 26, 2006 by one NG Der Sian, while it was in a custody arrangement with Reliance Innoventures.
• Reliance Projects Pte Limited was rechristened Emerging Market Investments & Trading Pte (EMITS) and its shares were given in custody to Reliance Innoventures Pvt. Ltd.. The ownership was supposed to be transferred to Emerging Market Investment & Trading Unlimited (EMITU), a BVI-based company.
• In December 2007, EMITS received a tidy sum of US$ 750 million from NexGen Capital.
• The entire fund was invested in compulsory convertible preference shares of AAA & Sons Enterprises Pvt. Ltd., a ADA Group entity, on December 17, 2007. The funds were downstreamed the same day to AAA Facilities Solutions Pvt. Ltd. only to be further downstreamed to four more entities – AAA Communication Pvt. Ltd., AAA Enterprises Pvt. Ltd., AAA Power Systems Global Limited, and AAA Project Ventures Pvt. Ltd..
• These four companies were later on merged with Reliance Innoventures, the holding company of the ADA Group, between 2008–09 and 2009–10, to cover the tracks.
• In a nutshell, EMITS  which received US$ 750 million and the subsidiaries through which the funds were moved to Reliance Innoventure were made to disappear.
• So, we have an abnormal case where the remitter of the money, which is EMITS, has been dissolved. Also, the ADA Group companies where the money landed have been dissolved. Only the ultimate beneficiary, which is Reliance Innoventure, exists.      

• Similarly, two massive fund diversions worth US$ 575 million were carried out Reliance Infrastructure in 2006. These funds were part of external commercial borrowings which the company had raised abroad for its still-born Dadri power project. These diversions were done in contravention of both FEMA. The modus operandi was almost the same as deployed before. Here is what our investigation has found:

• On October 17, 2006, Reliance Infrastructure diverted to India US$ 275 million of US$ 300 million it had raised in external commercial borrowing. The funds were invested as liquid funds in Reliance Mutual Fund only to be transferred abroad to Reliance Natural Resources (Singapore) Pte Limited and written off.
• Another big tranche of US$ 300 million was diverted to India in a similar manner by Reliance Infrastructure. This was part of US$ 360 million the company had raised in external commercial borrowings. After fund was diverted to India,  it was deployed again as liquid funds in Reliance Mutual Fund in November 2006. The fund was later siphoned off to Gourock Ventures, a company based in the British Virgin Islands.
• The remaining US$ 60 million of the external borrowings was directly diverted to Gourock Ventures.
• Another tranche of US$ 150 million raised in external commercial borrowing was also diverted to India. This was meant for a delsulphurization process supposedly to be conducted at another power plant. The RBI rejected a petition for the compounding of offence under FEMA against this transaction.   
• This way US$ 1535 million landed in the above-mentioned ADA Group companies in a fraudulent manner.  

Apparently, all these acts are not only ingenuous in their meticulous implementation but also audacious in their magnitude and brazen frequency.

According to the data provided by the NCLT, nine companies of the ADA Group had an outstanding of Rs. 1,78,491 crore in unpaid loans, or admitted claims in banking parlance, when they were put under the hammer. If we put together Rs. 1,78,491 crore in unpaid loans and Rs. 1,59,721 crore that lakhs of investors of these companies have lost since 2008, a staggering sum of Rs. 3,38,212 crore of public money has vanished in thin air, owing primarily to diversion of funds using fraudulent means and poor management by the ADA Group owned and headed by Anil Ambani. This erosion of public wealth is a colossus systemic failure on the part of government agencies. Four public sector banks­--Bank of Baroda, Bank of Maharashtra, Bank of India, State Bank of India--have reportedly declared various Reliance ADA Group companies as "fraud" loan accounts.

 

Before we delve into how a fraud of this scale was pulled off, it will be in order to take a look at the corporate structure of the Reliance ADA Group, which has business interests as diversified as telecom, financial services, construction and infrastructure development, entertainment, power generation and transmission, healthcare, manufacturing, defense, aviation, transportation, and insurance services, among others. As the flowchart given here shows, the main holding company of the group is Reliance Innoventure, which is owned 100 percent by Anil Ambani and his close family members. Reliance Innoventure owns four subsidiaries: Reliance Project Ventures, Reliance Business Machines, Reliance Inceptum and Reliance Communications Enterprises. These subsidiaries further down own Reliance Power, Reliance Infrastructure, Reliance Home Finance and Reliance Capital directly or through subsidiaries. Reliance Infrastructure and Reliance Capital, respectively, own Reliance Naval and Reliance Nippon Life.

Here is a flowchart showing Reliance Innoventure, the main holding company of the ADA Group and its main Subsidiaries

The complex corporate structure shown in the flowchart, however, covers only the main operating companies, leaving aside subsidiaries which are too numerous to be crunched in a single chart.

Suffice it to say that the group runs its businesses through the following six major companies, now bankrupt, and their numerous subsidiaries:

1. 1. Reliance Communication
   2. Reliance Naval
   3. Reliance Capital
   4. Reliance Power
   5. Reliance Home Finance
   6. Reliance Infrastructure   

The ADA Group came into being in July 2005 after a bitter feud between Anil Ambani and his elder sibling Mukesh over inheritance in the wake of their father Dhirubhai Ambani’s death. Anil Ambani, a Wharton graduate who had joined Reliance Industries Ltd in 1983 as its chief executive officer, received parts of Reliance Industries with interests in telecom, entertainment, financial services, power and infrastructure.

In less than a decade, the ADA Group became a market leader in several growth sectors – telecommunications; power generation, transmission and distribution; national road highways and metro rail systems; cement manufacturing; financial services; and media and entertainment. The unprecedented growth was powered by banks which funded the expansion of business operations with massive infusions of public money and by investors’ confidence which saw the pumping of thousands of crores of rupees in shares and equities the group put up for grab through various IPOs and other offerings from time to time. Reliance Power, for instance, mopped up Rs. 11,700 crore when it launched its IPO in 2008, which became the largest public offering of its time.

However, the spectacular growth story did not take much time to turn into a nightmare for creditors the next decade with almost all six major companies of the ADA Group becoming avid guzzlers of public money without any accountability whatsoever.

As illustrated in the table below, nine major companies of the crisis-hit group, namely, Reliance Communication (RCOM), Reliance Naval, Reliance Capital, Reliance Power, Reliance Home Finance and Reliance Infrastructure, have together piled up a staggering sum of Rs. 1,78,491 crore in unpaid loans secured largely from public sector banks and investors. The lenders have approached the National Company Law Tribunal (NCLT), constituted in June 2016 by the Central government under the Insolvency and Bankruptcy Code. The NCLT put all the companies under the hammer as part of debt resolution which led to the banks taking a huge haircut amounting to Rs. 1,62,976 crore. While the banks lost as much in unpaid dues, the total loss to investors is estimated to be Rs. 1,00,000 crore.

The details – derived from the NCLT filings by aggrieved banks – of the total debt/claim accumulated by nine major companies of Anil Ambani-owned ADA Group are provided here:

**Note: From respective annual reports.

Source: NCLT Order dated 27 February 2024 page 15 for Reliance Capital Limited – Annexure 1; Press report for acquisition of Reliance Home Finance Limited by Authum Investment & Infrastructure Ltd. – Annexure 2; Annual report of Reliance Infrastructure – Annexure 3; Press report for acquisition of Reliance Commercial Finance by Authum Investment & Infrastructure Ltd. – Annexure 4); NCLT Order page 6 and 7 – Annexure 5 for Reliance Naval; NCLT Order page 13, 14, and 15 – Annexure 6 for Reliance Communication Infra; NCLT Order page 29  – Annexure 7 for Reliance Big Pvt Ltd); Annual report of Reliance Communication FY 24-25 – Annexure 8.

As the table illustrates, the acquisition of Reliance Commercial Finance Reliance is too glaring to miss. Against an outstanding or admitted claim of debt of Rs. 11,000, Authum Investment & Infrastructure Ltd. bought the ADA Group company for only Rs. 1 crore. Another glaring example is the acquisition of Reliance Communications Infrastructure Limited by Project & Property Management Services, a company owned by Mukesh Ambani. The Reliance Industries Ltd. subsidiary placed a bid before the NCLT in 2019 to acquire Reliance Communications Infrastructure Limited as part of the Corporate Insolvency Resolution Process under the bankruptcy code. The ADA Group company, which is in the internet data business, had a right of way, or legal access, of 28,757 km of inter-city route and 7846 km of intra-city route. There were three more bidders, out of which one opted out and the two remaining bidders did not submit their revised resolution plans.

Mukesh Ambani won the bid and acquired the company for Rs. 455.90 crore against admitted claims of Rs. 47,251 crore in debt. It is interesting to note here that Reliance Project & Property Management Services, being a potential related party, was not eligible to bid for the acquisition of Reliance Communication Infrastructure. Under Section 29A proviso (c) of the Insolvency and Bankruptcy Code of 2016, no related party of a corporate debtor can place a bid let alone acquire a company (refer to relevant NCLT order in Annexure 6). 

Even as nine companies mentioned in the table above kept on piling up debt, which was deliberate and by design, the Reliance ADA Group devised means and methods to secrete away funds from these companies for personal enrichment and gratification to the detriment of both the lenders and the investors. As mentioned early on in the story, Reliance ADA Group promoter companies siphoned off about Rs. 28,874.07 crore from Reliance Communication, Reliance Capital, Reliance Power, Reliance Home Finance, Reliance Infrastructure, and Reliance Naval, which had together borrowed/pending claims of Rs. 1,78,491 crore from various banks/stakeholders.

Before shedding light on the findings of our story, it is worthwhile to mention that we had sent a detailed questionnaire to Mr. Anil Ambani and his son Jai Anmol with regard to the findings of our investigation on October 19, 2025, so that we could have their version and include the same in the story. The questionnaire was followed up with a reminder on October 24 and final reminder on October 27. Rather answers to those questions, we have received from their counsel a "Legal Notice of Defamation (including inter alia under Section 356 of the Bharatiya Nayay Samhita, 2023) and Interference with the Administration of Justice, amounting to Contempt of Court under the Contempt of Courts Act, 1971)."

In the notice, Reliance Infrastructure Limited and Mr. Anil D. Ambani, through their legal counsel, have categorically denied all allegations made in the Cobrapost investigation and described the claims made in the report as false, baseless and defamatory. The Group maintains that no court or tribunal has found them or any Reliance ADA Group entity guilty of any offence or financial wrongdoing.

The Group has asserted that Cobrapost’s publication of this story and the scheduled press conference amount to a “trial by media” on matters that are currently pending before competent authorities, including the Central Bureau of Investigation (CBI)and the Enforcement Directorate (ED). They contend that such public characterisation of unresolved judicial proceedings would interfere with the administration of justice, violate the constitutional presumption of innocence, and could constitute contempt of court. The ADA Group further emphasised that all underlying documents are publicly available, and that selective reproduction of such records serves no genuine public interest. The Group maintains that the Cobrapost report distorts the judicial process, substituting media perception for due legal adjudication.

The notice further accuses Cobrapost of engaging in a malicious and sensationalised campaign, arguing that the questionnaire sent to the ADA Group and the publicity material released in the run-up to the story used accusatory language such as “fraudulent diversion of funds” and “money laundering,” which were presented as established facts rather than questions or fair reportage. It also alleges that the proposed publication is motivated by mala fides, designed to damage the business reputation of Mr. Ambani and the ADA Group, and may amount to criminal intimidation and extortion.

In its factual rebuttals, the Group states that:

• The Corporate Insolvency Resolution Processes (CIRPs) of certain Reliance ADAG entities were lawfully resolved by the NCLT, Mumbai, with approval from creditors including public-sector banks, and remain valid and effective.
• Reliance Infrastructure Ltd. and Reliance Power Ltd. were never under CIRP, contrary to the claims attributed to Cobrapost.
• The stress resolutions of Reliance Commercial Finance Ltd. and Reliance Home Finance Ltd. were conducted under the RBI’s Prudential Framework for Resolution of Stressed Assets (2019), approved by the RBI, relevant lenders, and the Supreme Court, resulting in substantial recoveries for creditors.

Those who wish to see the content of the notice, we enclosed it as Annexure ADAG Response.

Cobrapost denies the bald charges and serious allegations made against it by Reliance Infrastructure Limited in a legal notice dated October 29, 2025. Cobrapost sent a questionnaire to Reliance ADAG entities with sufficient notice to respond well in time for publication of our story. Instead of responding to the questions so that we might incorporate the company and the promoters’ versions, Reliance ADAG group sent the legal notice to intimidate us from doing our job as journalists and issuing threats of civil and criminal legal action to dissuade us from publication and holding the press conference to announce our findings. Cobrapost reiterates our stand of working in public service to discharge its constitutional function and report its findings to the public at large.

Now, let us delve in detail into how each of these companies was manipulated by their key management personnel to pull off the massive fraud.

1. How A luxury yacht was Acquired for US$ 20 M Sourced From RCom 

In what could be billed as one of the first instances of fund diversion by any of the ADA Group companies, Reliance Communications Ltd., RCOM in short, diverted about US$ 20 million to help Anil Ambani, the group chairman, acquire a luxury yacht. An elaborate, though not perfect, cover was created for the acquisition of the luxury yacht abroad through Reliance Transport & Travels Pvt. Ltd., an ADA Group company. This was done some years before several group companies began to guzzle public money and default on repayment of loans.

Soon after the split of the Ambani empire, Anil Ambani gifted his wife, Tina Ambani, the former Bollywood actress, a luxury yacht just before Christmas in 2008 interview with Tina Ambani. In a grand gesture of their love, he christened it TiAn – a combination of their names. The yacht created quite a buzz in the media, some comparing it with a corporate jet that elder brother Mukesh Ambani had just gifted his wife Nita Ambani.

Along with the public, the Indian customs department also took a mild interest in the yacht. They presented a bill of Rs. 28 crore to the ADA Group company which had moored the yacht near Mumbai’s iconic Gateway of India. Anil and Tina were supposed to usher in 2009 in their spanking new yacht.  The Times of India quoted the customs authorities in their affidavit to the Bombay High Court that “…it is not a mere procedural lapse but a deliberate move by the ADAG to evade customs duty through a novel modus operandi.”

The story back then was that ADA Group imported it as a cargo from Jersey, a tax haven, in the UK. Therefore, the customs authorities slapped a notice for an import duty of Rs. 28 crore and also for a guarantee of Rs. 15 crore from the user of the yacht Anil Ambani group denies smuggling yacht. Ammolite Holdings, an ADA Group company, deposited Rs. 25 crore but the yacht was confiscated in February 2009 and the Ambanis were locked out of their prized possession, forcing them to go to the Bombay High Court. In December 2009, Ammolite Holdings withdrew the petition in a bid to reach an out-of-court settlement with the customs authorities.

Cobrapost’s investigation shows the Indian customs authorities at Mumbai were not off the mark when they leveled the allegation that the ADA Group company had used a “novel modus operandi” to sneak the yacht in.

Here is what we found:

• First, Jersey-based ADAG company Ammolite Holdings Ltd chartered the yacht for a year for US$400,000. In the second step, RCOM moved funds to Reliance Transport & Travels for a complete buyout. In the third step, the funds were directly advanced to Ferretti SPA of Italy, the owner of the yacht, upon an advice from Ammolite Holdings. In the final step, all investments in Ammolite Holdings were written off.
• However, the funds were diverted from RCOM in the form of a loan to Reliance Transport & Travels through Gateway Net Trading for the purchase of 10 million handsets. Ammolite Holdings was supposed to supply these handsets, though it had no experience to play a trader.
• Instead, the entire fund was used to acquire the yacht from Ferretti SPA of Italy.
• After the acquisition was complete, Reliance Capital which owned a 50 percent stake in Ammolite Holdings, wrote off the equity investment it had made in Ammolite Holdings.     

 

Initially, Reliance Transport & Travels was deputed the task of procuring the yacht and they delegated the task to Ammolite Holdings Limited for a sum of US$ 400,000 on a one-year-long contract through an MoU. The MoU was executed on October 22, 2008. Some months later, the yacht was bought out for a sum of around US$ 20 million. But the story is not as simple as it sounds.   

According to sources and records, Ammolite Holdings had entered into an agreement with Gateway Net Trading Pte Limited, Singapore, a subsidiary of RCOM, for the supply of 10 million handsets of specified make, technology, and features.

As per the agreement, Ammolite Holdings was to act as a trading agency and provide such services as the supply of handsets to Gateway Net Trading, which had been tasked by RCOM to procure 10 million handsets. There was one problem, though. Ammolite Holdings was not in the business of procuring mobile phones for consumers. And, it never did. Gateway Net Trading acted as the vendor to RCOM for providing handsets. In fact, RCom was also a corporate guarantor for any future funding in the company.

RCOM was one of the most resourceful and promising enterprises in the Reliance ADA Group’s kitty at the time. It had been at the centre of the booming consumer demand for cheap mobile phones since its entry into the field with the famous 'Monsoon Hungama' scheme a few years before, with the slogan 'Kar lo duniya mutthi mein' (Grab the world in your hands!).

Instead, Ammolite Holdings purchased the yacht from Ferretti SPA of Italy for Euro 11,640,875. Gateway Net Trading paid US$ 18.53 million (equivalent US$ amount) to Ferretti SPA for the acquisition on the instructions of Ammolite Holdings.

In the final step, ADA Group promoter company Reliance Capital which owned a 50 percent stake in Ammolite Holdings wrote off the equity investment it had made in Ammolite Holdings in books (refer to annual statement of RCap for FY 2022–23 enclosed as Annexure 7A and 8A).

Ironically, Ammolite Holdings had no business to show, which means it was a shell entity. Reliance Land Pvt. Ltd. held the rest of the stake in this entity.  

This event cast a long shadow over the company in the coming years as it began to pile up debt, and its attempt to keep afloat were fruitless even after it raised Rs. 4800 crore from investors by selling 338 million shares in 2014. Ultimately, the company became insolvent in 2023.  The total outstanding debt this ADA Group company owes to over 45 banks is Rs. 47,000 crore. Besides, Anil Ambani also failed to pay up Ericsson Rs. 458.77 crore and his elder sibling bailed him out of trouble from a Supreme Court contempt case as discussed earlier in the story. The company filed for bankruptcy after defaulting on bonds worth Rs. 24,000 crore.

As already mentioned somewhere in the beginning of the story, Mukesh Ambani has acquired Reliance Communication Infrastructure for Rs. 455.9 crore which is less than one-tenth of the total debt the ADA Group company owes to banks and investors. To reduce the debt, RCom has also finalized a deal to sell the telecom towers and spectrum to Mukesh Ambani-controlled Reliance Jio for Rs. 25,000 crore, but the deal has yet not been approved by regulatory authorities. The company is also planning to sell its DTH business and a piece of land in Navi Mumbai for Rs. 11,000 crore. The NCLT will now meet all the lenders and decide how the debt should be repaid.

2. DIVERSION OF FUNDS BY REL INFRA TO SHELL AND OFFSHORE ENTITIES

Our investigation reveals that ADA Group companies diverted funds worth Rs. 14,529.18 crore using 26 entities as SPVs to various offshore tax havens, such as Cyprus, British Virgin Islands, and Mauritius, apart from entities holding accounts in Swiss banks, the US, the UK and Singapore. These shell entities received monies from ADA Group companies like Edico Ventures, Reliance Innoventure, and Reliance Inceptum, among others.

We have identified the locations of at least 14 of these 26 shell entities. Out of these entities, Tanzanite Holdings Limited, Batiste Unlimited, Radium Unlimited, and Hui Investment Unlimited are located in Jersey, an island among the British Virgin Islands; Reindeer Holdings Limited, Atthery Assets Limited, Tonite Holdings Limited, Lawson Investing Limited, and Reliance Infra Projects International Limited are located in the British Virgin Islands; AAA Enterprises and Ventures, Ikosel investments Limited, Kemigton Enterprises Limited, karhula  Enterprises Limited, and Dornsen investments Limited are located in Cyprus.    

The details of these SPVs used for funds diversion are tabulated as follows:

S. No.	Name of SPVs	Location of ADA Group Shell Entities	Source of Money
	Larimar Holding Company	—	—
	Tanzanite Holdings Limited	Jersey	Edico Ventures
	Batiste Unlimited	Jersey	Reliance Innoventure
	Radium Unlimited	Jersey	Reliance Innoventure
	Hui Investment Unlimited	Jersey	Reliance Inceptum
	Summerhill Limited	—	—
	Dulwich Limited	—	—
	Reindeer Holdings Limited	BV Islands
	Northern Atlantic Consultancy Services Group Limited	—	—
	Northern Atlantic Trading Unlimited	—	—
	Northern Atlantic Investments Unlimited	—	—
	Trans-Pacific Holding	—	—
	Trans-Atlantic Holding	—	—
	Trans-Americas Holding	—	—
	AAA Enterprises and Ventures	Cyprus	—
	Ikosel investments Limited	Cyprus	—
	AAA Telecom Holdings	—	—
	AAA Infrastructure Investments	—	—
	Atthery Assets Limited	BV Island	—
	Tonite Holdings Limited	BV Islands	—
	Lawson Investing Limited	BV Islands	—
	ADAE Global Limited	—	—
	Reliance Infra Projects International Limited	BV Islands	—
	Kemigton Enterprises Limited	Cyprus
	Karhula  Enterprises Limited	Cyprus
	Dornsen investments Limited	Cyprus

            Note: (—) information in this regard is not available.

The annual reports of these companies are not readily available in public domain. We have managed to get hold of the 2010 financial statement of Batiste Unlimited (enclosed here as Annexure 9. This entity was incorporated on December 6, 2007 in Jersey, Channel Islands. All the annual reports suggest that the funds received in the companies have been deployed in subsidiaries/entities downstream and gradually written off by the holding company.

A strange oddity of these transactions is Yes Bank from which a good deal of money – Rs. 800 crore – was sourced for these diversions which makes them suspicious in the first place. A typical multi-layered modus operandi was deployed for the diversion.

Here is what we found out:

• In the first step, funds amounting to Rs. 14,529.18 crore were siphoned off from Reliance Infrastructure, which contributed the bulk, Reliance Capital, and Reliance Commercial Finance. Yes Bank was also one of the sources of funds.
• In the second step, a special purpose vehicle, CLE Pvt. Ltd., an NBFC, was used for the extraction of funds. 
• In the third step, the extracted funds were diverted to Indian shell entities in the form of non-convertible debentures/loan/advances. A multi-layered corporate ownership arrangement was created for this purpose.
• In the fourth step, these entities were merged with Edico Ventures which diverted the funds to offshore entities, listed in the table in the beginning of the section with the locations of 14 of them. 
• All the funds were gradually written off.
• In the final step, 25 of these companies were merged with six promoter-group companies after the diversion of funds was complete.
• The name of CLE Pvt. Ltd., an NBFC used for fund extraction, was changed at least half a dozen times to keep the diversions under wraps.

1. Funds diversion from Reliance Infrastructure

Reliance Infrastructure is the largest company in Anil Ambani’s stable and is involved in a myriad of businesses across sectors ranging from infrastructure development – roads, airports and metro rail construction – and power projects, to power generation, transmission, distribution and trading, to engineering, procurement and construction services, and defence and aviation. The company develops projects through various Special Purpose Vehicles (SPVs) and subsidiaries. It is worth noting that Reliance Infra is the execution arm of Reliance Power, serving as its engineering, procurement and construction contractor (EPC) for large power plants. Anil Ambani and Reliance Infra are promoters of Reliance Power and hold, respectively, 19.1 percent and 24.88 percent stake in Reliance Power. The rest of the stake is held by institutional and retail investors. 

As our investigation reveals, Reliance Infrastructure, and two other ADA Group companies, instead of putting the borrowed monies to good use diverted funds amounting to Rs. 14,529.18 crore to shell entities and from there back to promoter-group companies.

Frequent Name Change of SPV: A special purpose vehicle called CLE Pvt. Ltd., an NBFC, was used to extract funds from Reliance Infrastructure, Reliance Capital, Reliance Home Finance and Reliance Commercial Finance in the form of compulsory convertible debentures (CCDs), non-convertible redeemable preference shares (NCRPS), and advances. CLE Pvt. Ltd. frequently changed its name at least half a dozen times – from Crest Logistics & Engineers Pvt. Ltd. to Reliance Utility Engineers Limited to Reliance Utility Engineers Pvt. Ltd. to Reliance Energy Investments Limited and finally to Sonata Investments Limited. The frequent changes of name helped to camouflage the fraud.

The details of the fund diversion to CLE Pvt. Ltd. are provided in the following table:

S. No.	Name of the company	Amount (in Rs crore)	Source
1.	Reliance Infrastructure Limited	8274.28	Open Charge register enclosed as Annexure 10
2.	Reliance Infrastructure Limited	1775.00
3.	Reliance Capital Limited	3270.00
4.	Reliance Commercial Finance Limited	286.90
5.	Reliance Home Finance Limited	123.00
6.	Yes Bank Limited (Edico)	800.00
	Total	14,529.18

 

As the table illustrates, out of Rs. 14,529.18 crore diverted in this manner, Rs. 10,049 crore was sourced from Reliance Infrastructure, while Reliance Capital and Reliance Commercial Finance contributed, respectively, Rs. 3270 crore and Rs. 286 crore. The rest Rs. 800 crore was sourced from Yes Bank. Surprisingly, guarantee for shell companies was also given by Reliance Infrastructure which appears to be an afterthought.

Our investigation identified at least 23 entities, among many, which were used for the diversion of funds from CLE Pvt. Ltd. as on June 30, 2013. We have also tracked around Rs. 8752 crore which diverted in the form of CCDs and NCRPS.

 

S. No.	Name of the Company	Instruments Used	Amount in Rs. crore
	A-one communication Services Pvt Ltd	CCD	245
	A-one Telecom Services Pvt Ltd	CCD	370
	Fortress Infotech Pvt Ltd	CCD	241
	Madhuram Softech Pvt Ltd	CCD	265
	Nectar Mercantile Pvt Ltd	CCD	301.70
	Netlink Trading Pvt Ltd	CCD	210
	Onetel Communication Pvt Ltd	CCD	366
	Telebase Engineers Pvt Ltd	CCD	143
	Blackstone Corporate Services Pvt Ltd	CCD	196
	Blackstone Infotech Pvt Ltd	CCD	132
	Blackstone Mercantile Pvt Ltd	CCD	120
	Eleder IT Solution Pvt Ltd	CCD	225
	Teledata wireless Solution Pvt Ltd	CCD	300
	Trans Americans Enterprises Pvt Ltd	CCD	845.79
	Elder IT Solutions Pvt Ltd	CCD	250
	Swan Consultants Pvt Ltd	NCRPS	350
	Casagrande Developers Pvt Ltd	NCRPS	10
	Mahima Mercantile Pvt Ltd	NCRPS	50
	Mindtree Industrial Finance Limited	NCRPS	50
	Neptune Steel Strips Limited	NCRPS	50
	Pearl Housing Finance I Limited	NCRPS	50
	Shriyam Autofin Limited	NCRPS	50
	Traitrya Construction Finance Limited	NCRPS	50
	Advance against purchase of shares	Advance	900
	Capital advances to suppliers	Advance	2982.10
		Total	8752.59

Note: CCDs: compulsory convertible debentures; NCRPS: non-convertible redeemable preference shares. (Refer to page 18-21 of audited FS of REL Utility Engineers Limited enclosed as Annexure 11)

We have also identified the following 26 entities which includes the aforesaid companies used for the diversion of funds. These entities were ultimately merged with Edico Venture Limited, a promoter-group company, which means both assets and liabilities rested with the company:

S. No.	Name of the Company	Name of the transferee company	Remarks
1.	Blackstone Corporate Services Pvt. Ltd.	Edico Venture Limited	A copy of the merger order approved by Company Law Board is enclosed as Annexure 12
2.	Shreenathji Krupa Project Ventures Pvt. Ltd.
3.	Kent Infotech Pvt. Ltd.
4.	Air Ocean Logistics Pvt. Ltd.
5.	Blackstone Mercantile Pvt. Ltd.
6.	Tractus Consultants Pvt. Ltd.
7.	Princeps Advisory Services Pvt. Ltd.
8.	OciusInfonet Services Pvt. Ltd.
9.	Northstar Telecom Services Pvt. Ltd.
10.	Northstar Software Solutions Pvt. Ltd.
11.	Nectar Mercantile Pvt. Ltd.
12.	Madhuram Soft-Tech Pvt. Ltd.
13.	Fortress Infotech Pvt. Ltd.
14.	DignusMeditainment Ventures Pvt. Ltd.
15.	Attollo Finance Management Pvt. Ltd.
16.	Aachal Soft-Tech Pvt. Ltd.
17.	Wirelabs Communication Systems Pvt. Ltd.
18.	Spectra Wireless Devices Pvt. Ltd.
19.	Nextnet Technologies Pvt. Ltd.
20.	Northern Wireless Solutions Pvt. Ltd.
21.	Cellnet Wireless Solutions Pvt. Ltd.
22.	Aaina Soft-Tech Pvt. Ltd.
23.	Dyna Systems Pvt. Ltd.
24.	White Gold Properties Pvt Ltd
25.	Trans pacific Advisory Services Pvt Ltd
26.	Navketan Telecom Pvt. Ltd.

Note: Annual financial statement of EDICO Ventures for FY 2012-13 and 2013-14 is enclosed as Annexure 13)

Before the merger with Edico Ventures, however, these entities were merged with six entities as discussed later.

The funds were diverted in the form of non-convertible debentures to Edico Ventures Limited which were ploughed back to promoter-group companies at a huge premium. These shell entities were set up by chartered accountants Anand Chaturvedi, Sunil Doshi and VB Desai. Acting as facilitators, the troika created a complex box structure through cross holding inter se shell companies to keep the identity of the ultimate beneficial owner of the structure cloaked in secrecy. For the uninitiated, a box structure is a opaque, multi-layered corporate ownership arrangement which allows a holding company controlling stake in step-down subsidiaries through cross-holdings, like an intricate web.     

Interestingly, within three–four years of the fund diversion, 25 of these companies were merged with six promoter-group companies. Another interesting fact is that most of the aforesaid transferor companies were themselves transferee companies which merged into them various entities that were the beneficiaries of the fund diversion.

Details of these companies are tabulated as under:

S. No.	Name of the Company	Name of the Transferee Company	Remarks
1.	Aachman Soft-Tech Pvt. Ltd.	Aaina Soft-tech Pvt. Ltd.	Copy of merger order enclosed as Annexure 14
2.	Abhay Telecom Services Pvt. Ltd.
3.	Maestro It Solutions Pvt. Ltd.
4.	Netlink Trading Pvt. Ltd.
5.	Trans-Atlantic Endeavor Management Pvt. Ltd.
6.	A-one communication Services Pvt Ltd	Northstar Telecom Services Pvt Ltd	Copy of merger order enclosed as Annexure 15
7.	Blackstone infotech Pvt Ltd
8.	Telebase Engineers Pvt Ltd
9.	Solaris Trading Pvt Ltd
10.	Norfolk Software Pvt Ltd
11.	Fortress Telecom Pvt Ltd
12.	Fortress Software Solutions Pvt Ltd
13.	A-one Telecom Services Pvt Ltd	Shreenathji Krupa Project Ventures Pvt. Ltd.	Copy of merger order enclosed as Annexure 16
14.	Blackstone resources Pvt Ltd
15.	Onetel Communication Pvt Ltd
16.	Solaris Software Pvt. Ltd.
17.	International Convention Centre Construction Pvt Ltd
18.	Norfolk IT Solutions Pvt Ltd	Nectar Mercantile Pvt Ltd	Copy of merger order enclosed as Annexure 17
19.	Norfolk Soft-tech Solutions Pvt Ltd
20.	Northstar Soft-tech Solutions Pvt Ltd
21.	Petron Contractor Pvt. Ltd.
22.	Shenzhen Construction Engineering Group Pvt Ltd
23.	Vikata Engineering Services Pvt Ltd
24.	Variegate Import & Export Pvt Ltd	Monika Holdings Pvt Ltd	Copy of merger order enclosed as Annexure 18
25.	Coyoto Investments Pvt Ltd	Variegate Import &  Export Pvt Ltd	Copy of merger order enclosed as Annexure 19

Aaina Soft-tech, which was used for the diversion of funds, is one of the six companies with which the first five companies were merged. Similarly, Variegate Import & Export Pvt Ltd, another such company, became the owner of Coyoto Investments Pvt. Ltd. as demonstrated in the table after the merger. This is how the box structure was put in place through these mergers and cross-holdings.

If the diversion of funds majorly by Reliance Infrastructure, and Reliance Capital, Reliance Home Finance, and Reliance Commercial Finance to offshore entities in a dubious manner was audacious and ingenious in its orchestration, so was the diversion of funds by Reliance Capital, through Reliance Home Finance, Reliance Commercial Finance, and Reliance Corporate Advisory Limited. Together these three companies diverted funds more than Rs. 14,344 crore and made it disappear in thin air. 

3. SIPHONING OFF FUNDS BY RELIANCE CAPITAL

The company deals in lending, security trading, and insurance, both life and general, among others and undertakes all its business activities through 16 major subsidiaries of which Reliance Home Finance, Reliance Commercial Finance, and Reliance Corporate Advisory Services  have been investigated by Cobrapost for fund diversion.

As Cobrapost investigation reveals, Reliance Capital's subsidiaries – Reliance Home Finance Ltd (RHFL), Reliance Commercial Finance Limited (RCFL), and Reliance Corporate Advisory Services Limited (RCASL) – have together pulled off a fraud of Rs. 14344 crore. They have done so by diverting funds, creating one layer after another layer to cover the tracks while routing those funds to family coffers. Reliance Capital went bankrupt seeking settlement of an outstanding debt/admitted claims of Rs. 26,087 crore through NCLT. Though the NCLT approved a bid of Rs. 9861 crore by the Hindujas in February 2024, the deal did not offer a single farthing to its shareholders of Reliance Capital.

In fact, Reliance Capital and its subsidiary RHFL have together defaulted on the payment of Rs. 35,206 crore they borrowed from various banks.

1. Siphoning off of funds through Reliance Home Finance

Analysis of the documents accessed by Cobrapost has revealed that Reliance Home Finance Ltd. (RHFL), the retail lending arm of Reliance Capital in housing and construction sector, and insurance business, has over the years siphoned off a sum of Rs. 7965 crore by advancing loans to 49 dubious entities, which is more than 50 percent of the book size, or net worth, of the company. The details of the recipient companies are provided in the following table:

S. No.	Names of Recipient Companies	Amount (Rs. in crore)
1.	Aashish Power Plant Equipment Pvt. Ltd.	99.60
2.	Accura Productions Pvt. Ltd.	186.74
3.	Adhar Project Management & Consultancy Pvt. Ltd.	210.13
4.	Adhar Property Consultancy Pvt. Ltd.	189.20
5.	Adhar Real Estate Consultancy Pvt. Ltd.	202.40
6.	Arion Movie Productions Pvt. Ltd.	187.50
7.	Azalia Distribution Pvt. Ltd.	175.50
8.	CelebritaMediahouse Pvt. Ltd.	210.00
9.	Citi Securities And Financial Services Pvt. Ltd.	220.80
10.	Creatoz Builders Pvt. Ltd.	103.31
11.	Crest Logistics & Engineers Pvt. Ltd.	160.00
12.	D B Realty Limited	66.70
13.	Deep Industrial Finance Limited	220.00
14.	Edrishti Movies Pvt. Ltd.	200.96
15.	Gamesa Investment Management Pvt. Ltd.	184.74
16.	Golden Beach Infracon Pvt. Ltd.	97.50
17.	Hirma Power Limited	210.00
18.	Indian Agri Services Pvt. Ltd.	205.74
19.	Ippy Entertainment Pvt. Ltd.	196.33
20.	Jayamkondam Power Limited	104.00
21.	Kunjbihari Developers Pvt. Ltd.	186.61
22.	Medybiz Pvt. Ltd.	205.02
23.	Mohanbir Hi-Tech Build Pvt. Ltd.	242.25
24.	Nationwide Communication Pvt. Ltd.	175.00
25.	Neptune Steel Strips Limited	102.50
26.	Netizen Engineering Pvt. Ltd.	214.54
27.	Pearl Housing Finance India Limited	200.00
28.	Phi Management Solutions Pvt Ltd	208.56
29.	Pifiniti Movies Pvt. Ltd.	188.66
30.	Reliance Cleangen Limited	40.48
31.	Rpl Aditya Power Pvt. Ltd.	139.50
32.	Rpl Solaris Power Pvt. Ltd.	181.00
33.	Rpl Star Power Pvt. Ltd.	200.00
34.	Rpl Sunlight Power Pvt. Ltd.	147.00
35.	Rpl Surya Power Pvt. Ltd.	164.00
36.	Sahishnota Advisory Services Pvt. Ltd.	150.00
37.	Skyline Global Trade Pvt. Ltd.	91.00
38.	Space Trade Enterprises Pvt. Ltd.	136.61
39.	Species Commerce & Trade Pvt. Ltd.	121.00
40.	Summit Ceminfra Pvt. Ltd.	119.00
41.	Thwink Big Content Pvt. Ltd.	207.45
42.	Traitrya Construction Finance Limited	185.00
43.	Tulip Advisors Pvt. Ltd.	202.00
44.	Vinayak Ventures Pvt. Ltd.	221.13
45.	Visa Capital Partners	18.78
46.	Vishvakarma Equipment Finance India Limited	200.00
47.	Wadhawan Holdings Pvt. Ltd.	76.53
48.	Wallace Movies And Entertainment Pvt. Ltd.	160.50
49.	Worldcom Solutions Limited	50.00
	Total	7965.27

Note:Figures as on March 31, 2023; Source: Refer to page 135 of Annual report of RCFL – Annexure 9A)

Furthermore, in their order dated March 31, 2023, SEBI relied on BoB forensic audit to say the entire loaned sum of Rs. 8884.46 crore found its way into the coffers of 14 ADA Group promoter and linked companies, the ultimate beneficiaries of this fraud. As the table below further shows, these 14 companies in fact got Rs. 8827.88 crore in what prima facie looks like dubious transactions.

S. No.	ADA Group Companies	Amount (Rs. in crore)
1.	Reliance Capital Limited	2359.91
2.	Reliance Commercial Finance Limited	2278.58
3.	Reliance Infrastructure Limited	1559.78
4.	Reliance Home Finance Limited	1514.46
5.	Reliance Big Entertainment Pvt. Ltd.	254.09
6.	Reliance Broadcast Network Limited	218.19
7.	Reliance Business   Broadcast    News Holdings Limited	200.50
8.	Reliance Power Limited	135.64
9.	Crest Logistics And Engineers Pvt. Ltd.	106.00
10.	Gamesa Investment Management Pvt. Ltd.	100.00
11.	Kunjbihari Developers Pvt. Ltd.	70.00
12.	Reliance Mediaworks Financial Services Pvt. Ltd.	14.73
13.	Reliance Nippon Life Insurance Limited	11.00
14.	Unlimit IOT Pvt. Ltd.	5.00
	Total

Note: Relevant extract of SEBI Order dated August 22, 2024, page 15-16 enclosed as Annexure 18A.

As illustrated in the following table, the shareholding pattern of this major Reliance Capital subsidiary suggests that RHFL was controlled by Reliance ADA Group promoters:

S. No.	Promoters	March 2018	March 2019	March 2020	March 2021
1.	Anil D. Ambani	0.06	0.06	0.06	0.06
2.	Tina A Ambani	0.05	0.05	0.05	0.05
3.	Jai Anmol A Ambani	0.02	0.02	0.02	0.02
4.	Jai Anshul A Ambani	0.00	0.00	0.00	0.00
5.	Kokila D. Ambani	0.11	0.11	0.11	0.11
6.	Reliance Inceptum                   Pvt. Ltd.	20.14	20.14	0.00	0.00
7.	Reliance Innoventures Pvt. Ltd.	0.12	0.12	0.00	0.00
8.	Reliance             Infrastructure Consulting & Engineers Pvt. Ltd.	5.77	5.62	0.61	0.61
9.	Crest Logistics and Engineers Pvt. Ltd.	0.67	0.67	0.67	0.67
10.	Reliance             Infrastructure Management Pvt. Ltd.	0.14	0.14	0.14	0.14
11.	Reliance   Capital Limited	47.91	47.91	47.91	47.91
	Total	74.99%	74.85%	49.58%	49.58%

            Source: Refer to page 5–6 of the SEBI Order dated August 22, 2024 enclosed as Annexure 18B)

The source of funds amounting to Rs. 7965 crore that RHFL disbursed to 49 entities, which turned into non-performing assets (NPAs), was loans the company secured from various public sector banks/investors.

How BoB chose only to whine: In March 2011, Reliance Capital had an outstanding debt of Rs. 18,483.02 crore. Alarmed, perhaps, at the ADA Group’s propensity for delinquency in discharging liabilities towards lenders, the Bank of Baroda (BoB), the lead bank of a consortium of PSU lender banks, conducted a forensic audit of its loan transactions with RHFL in January 2020. The audit identified the movement of funds and found RHFL had made disbursals of loans to Potentially Indirectly Linked Entities (PILEs) between April 01, 2016 and June 30, 2019, the review period.

Some of the main highlights of the BoB audit are as follows:

• Reclassification of related parties: The BoB audit identified eight borrower entities which were earlier classified as related parties of Reliance Power Limited and Reliance Infrastructure Limited and reflected as such in the books of RHFL. HOWEVER, SHORTLY BEFORE THE DISBURSAL OF THESE DUBIOUS LOANS, THESE ENTITIES WERE RECLASSIFIED AS NON-RELATED PARTY. RHFL THEN DISBURSED THESE EIGHT RECLASSIFIED ENTITIES A LOAN OF RS. 1323.43 CRORE.
• Use of shell entities: The audit report also averred that these entities did not have any business let alone cash flow streams, which means they were simply shell entities created to route the funds, disbursed to them in loan by the consortium, to Anil Ambani-owned group companies.
• Bogus companies: Another striking finding of the BoB audit was that most of the companies have a common address and email ID. In many cases, these companies have common/cross shareholding. (Refer to SEBI Order page 144 of Annexure 18C.)

It is surprising to note here that the consortium of lender banks led by the BoB preferred to twiddle their thumb in spite of the damning audit report. They did not invoke the corporate guarantee given by Reliance Infrastructure and Reliance Power to recover the unpaid dues or file an FIR against the key management personnel of these companies under the various provisions of the Companies Act of 2013, such as Section 447, and the Indian Penal Code, now Bharatiya Nyay Samhita (BNS), for fraudulently diverting Rs. 1323.43 crore to shell entities even when they had solid evidence of this gross criminal act in the form of the forensic audit. They even did not declare the companies and its owner a willful defaulter. They instead preferred auction route and took a large hit of more than Rs. 8000 crore. The bankers could have invoked the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act of 2002, popularly known as SARAESI Act, a specifically designed legal framework for lenders to seize properties and other assets without intervention of courts in order to recover outstanding dues. 

This is contrary to the stance that Swedish telecom equipment manufacture Ericsson took in 2019 while claiming its dues of Rs. 458.77 crore from Reliance Communications and approached the Supreme Court which held Anil Ambani in contempt. To help him avoid a jail term, his brother Mukesh Ambani coughed up the money a day before the deadline to pay up expired.

In fact, Authum Investment & Infrastructure Ltd., which acquired Reliance Home Finance through the CIRP process, has preferred recovery proceedings of these loans by invoking corporate guarantee of Reliance Infrastructure (Annexure 20). The same could have been done by the public sector banks (PSBs) rather than adopting a liberal approach of remaining passive and hoping a turnaround or something more sinister.

2. Siphoning off funds through Reliance Commercial Finance

Adopting the same modus operandi, Reliance Commercial Finance Limited (RCFL), a subsidiary of Reliance Capital, has defrauded various PSBs to the tune of Rs. 4979.89 crore. Reliance Commercial Finance, involved in SME and vehicle financing, routed the funds it borrowed from banks through 27 entities, listed in the following table, as our investigation reveals. The fund diversion was cloaked in loans:

S. No.	Name of ADA Group companies	Amount of loan (in Rs. crore)
	Aashish Power Plant Equipment Pvt. Ltd.	185.00
	Accura Productions Pvt. Ltd.	310.00
	Adhar Project Management & Consultancy Pvt. Ltd.	65.09
	CelebritaMediahouse Pvt. Ltd.	140.00
	Crest Logistics & Engineers Pvt. Ltd.	286.90
	Edrishti Movies Pvt. Ltd.	125.00
	Gamesa Investment Management Pvt. Ltd.	122.70
	Hirma Power Limited	222.41
	Indian Agri Services Pvt. Ltd.	30.00
	Kalai Power Pvt. Ltd.	260.80
	Kunjbihari Developers Pvt. Ltd.	108.75
	Medybiz Pvt. Ltd.	118.00
	Mohanbir Hi-Tech Build Pvt. Ltd.	20.44
	Nationwide Communication Pvt. Ltd.	25.00
	Reliance Big Entertainment Pvt. Ltd.	246.83
	Reliance Broadcast Network Limited	33.50
	Reliance Cleangen Limited	270.49
	Rpl Aditya Power Pvt. Ltd.	40.00
	Rpl Solaris Power Pvt. Ltd.	188.00
	Skyline Global Trade Pvt. Ltd.	290.00
	Species Commerce & Trade Pvt. Ltd.	235.50
	Summit Ceminfra Pvt. Ltd.	300.00
	Thwink Big Content Pvt. Ltd.	350.00
	Tulip Advisors Pvt. Ltd.	297.95
	Vinayak Ventures Pvt. Ltd.	54.50
	Worldcom Solutions Limited	353.03
	Zapak Digital Entertainment Limited	300.00
	Total	4979.89

Source: Refer to page 135 of annual report of RCFL enclosed as Annexure 20A.

Here again, the funds these companies received as loans from RCFL, which are almost akin to the beneficiaries of RHFL, have been routed similarly to promoter-group companies directly or through intermediary companies as brought out by the SEBI in its order of August 22, 2024 (Annexure 18C).

Like in the case of RHFL, most of the companies mentioned in the table above have primarily no business activity to name, which means they all are shell entities. These companies have been used as SPVs to route funds received in loans from RCFL to promoter group-controlled companies. These companies have common addresses and common directors. (Refer to the SEBI Order enclosed as Annexure 18D.)

Furthermore, as brought out in the SEBI Order, these companies have cross shareholding, which means they are operated in a single group.

RHFL bought for a song: As the debt profile of the company tabulated hereunder suggests, RHFL had an outstanding liability of Rs. 16,283.44 crore in 2018–19.

Liabilities (Rs in crore)	Fiscal Year
	2017–18	2018–19
Borrowings other than debt securities	6156.12	8819.67
Other liabilities include trade payables, debt securities, subordinate liabilities, provisions and other financial liabilities	7427.11	7463.77
Total	13,583.23	16,283.44

Note: Relevant extract of the Annual Report is enclosed herewith as Annexure 20B (colly).

As mentioned earlier, the consortium led by the Bank of Baroda instead moved to initiate debt resolution proceedings against RHFL and RCFL after the aforesaid loan became a non-performing asset. As a result, the lenders were forced to take a massive haircut when both RHFL and RCFL were put under the hammer by the time of which the admitted claims against them stood, respectively, at Rs. 11,540 crore and Rs. 11,000 crore.

Actually, Authum Investment & Infrastructure Ltd. acquired RHFL and RCFL literally for a song. The Kolkata-based NBFC paid Rs. 3351 crore for RHFL, while it acquired RCFL for a laughable Rs. 1 crore, against a claimed exposure of more than Rs. 22,540 crore. The lending banks lost nearly seven times the money the companies owed to them.

It is surprising to note that within a year of acquisition, unlike the PSB consortium, Authum Investment has preferred invocation of corporate guarantee and started recovering a substantial portion of loan from the ADA Group subsidiaries which the PSBs could have done in the first place (refer to the relevant extract of the annual report and media report enclosed as Annexure 21.

3. Reliance Corporate Advisory Services

Another subsidiary of Reliance Capital which has been used as an SPV to route funds to Anil Ambani-promoted group companies in the form of zero-percent debentures and loans is Reliance Corporate Advisory Services Ltd (RCASL). Our investigation has found Reliance Capital to have routed more than Rs. 1400 crore through RCASL using dodgy inter-corporate loans.

The typical modus operandi used by Corporate Advisory Services is as follows:       

• Loans were advanced from holding company Reliance Capital to Reliance Corporate Advisory Services (Note 10 of the annual report page no. 21 enclosed as Annexure 22).
• Reliance Corporate Advisory Services used these borrowed funds to grant loans downstream to or make investment in various companies to finally plough back in companies personally controlled by ADA Group promoters as illustrated in the table below (relevant extract of the annual report page 18,19, and 20 enclosed as Annexure 23).
• In most cases, the loan was granted to promoter-group companies of various groups like Yes Bank (Rana Kapur), with prime focus on Vasu Bhagnani, Indiabulls and Wadhawan-controlled DHFL, among others (refer to the ED proceedings against Anil Ambani enclosed as Annexure 24).
• In consideration of these loans and investments, the promoter of ADA Group received kickbacks in Anil Ambani’s personally controlled companies from these recipient companies. These transactions are part of the ongoing ED probe.
• The value of transactions involved is Rs. 1400 crore. This is typically an exercise in siphoning off the funds from the company and to hide the blatant fraud from regulatory agencies, auditors and stakeholders.

As illustrated in the table below, RHFL and RCFL together extended a sum of Rs. 288 crore in loan/investment to Wadhawan Holdings, a company owned by Wadhawan brothers of Dewan Housing Finance Ltd. In turn loans worth Rs. 1285 crore were secured ADA Group promoter-controlled companies. This is nothing but a round-tripping exercise aimed to camouflage these dubious transactions. 

Sums granted in loans/investment		Loans secured in promoter-controlled companies (Rs. in crore)
Wadhawan Holdings (by RHFL)	90	Kunjbihari Developers	650
Wadhawan Holdings (by RCFL)	198	Edico Ventures	635
Total	288		1285

Note:    Refer to charge registers provided in Annexure 25.

It is worthwhile to mention here that RCASL, and many other Reliance Capital subsidiaries, is still operational and a large recovery is possible from the beneficiaries.

Strangely, the NCLT approved a bid of Rs 9861 crore placed by the Mauritius-based IndusInd International Holdings Ltd (IIHL), owned by the Hindujas, to acquire Reliance Capital and its subsidiaries. This was almost a third of the admitted claim of over Rs. 26,089 crore, leaving the investors high and dry even as the lenders lost Rs. 16,222 crore in unpaid loans.

The proclivity to indulge in fraudulent transactions and defraud both lenders and investors does not stop here. It, in fact, transcends national boundaries as our investigation further shows.

IV. Project Hollywood Goes Bust

The Reliance ADA Group and Steven Spielberg made a joint venture to produce Hollywood films. Both owned an equal stake in Dream Works II Holding Co. LLC and a part of the Reliance ADA Groups investment was sourced from Reliance Innoventures, which this investigation has shown is a parking lot for funds diverted from Reliance ADA Group companies.

This means that a number of Steven Spielberg films and productions were part-funded by money that was likely illegal diversions from loans taken from Indian public sector banks, investments, public offerings and money of the Indian public acquired through other debt and equity instruments.

Besides the above, this Cobrapost investigation has also found that the money sent from Reliance ADAG companies to the JV with Steven Spielberg, viz Dream Works II Holding LLC, was sent through convoluted channels. Ultimately those led to Reliance Big Entertainment (USA) from Indian entities—Reliance Big Entertainment (India) Pvt Ltd and Reliance Interactive Advisers Pvt Ltd. Tina Ambani, wife of Reliance ADA chairman Anil Ambani, served as director of both companies (refer Annexure X1). Anil Ambani was the significant beneficial owner of Reliance Interactive Advisers Pvt Ltd. (refer Annexure X2)

Dream Works II Holding LLC filed a statement showing negative net worth from its very first year of incorporation, meaning it was showing losses nearly as high as its capital investment. This should have come up in statutory Annual Performance Reports (APRs) filed by Reliance ADAG holding companies with RBI. This raises a question whether RBI scrutinised the investments following the filing of the APRs, provided these were filed.

The website of ADA Group company, Reliance Entertainment, claims that the partnership led to the making of popular and award-winning films including Academy and Golden Globe winners such as Green Book, The Post and 1917. Academy Awards’ Best Picture-winners Green Book stars Mahershala Ali, The Post stars Meryl Streep and is about the US-based newspaper The Washington Post. Besides that there were other productions such as Tom Hanks-starrer Bridge of Spies and Emily Blunt-starrer The Girl on the Train.

For several years, Anil and Tina Ambani were spotted at the hottest film events such as the Cannes Film Festival and the Academy (or ‘Oscar’) Awards ceremonies.

Cobrapost has found that the partnership between Steven Spielberg and Reliance ADA Group was built using funds from the promoter group companies. This included Rs 395 crore seed money from Reliance Innoventures, which is a parking lot for funds siphoned off from Reliance ADA Group listed companies. Reliance ADA Group promoter company Reliance Interactive Advisors Private Limited invested Rs 1,700 crore in Dream Works as on 31 March 2015.

In order to show the trail of investments, our investigation traces the money back from Dream Works II Holding Co. LLC—the joint venture between Steven Spielberg and the Reliance ADA Group.

• Cobrapost traced back the funding of Dream Works Studios, the corporate entity of which is M/s Dream Works II Holding Co., LLC with a registered office at Corporation Trust Center, 1209 Orange Street, Wilmington, County of New Castle, Delaware, USA. This SPV was created as the joint venture of Mr. Steven Spielberg and ADA Group:

S. No.	Particulars	Group	Share
	Reliance Big Entertainment (US) Inc	Reliance ADA Promoter Group	50%
	DW Management LLC	Steven Spielberg Group	50%

The annual report of M/s Dream Works II Holding Co., LLC and Reliance Big Entertainment (US) Inc for CY 2011 is enclosed as Annexure X3.

• The shareholding pattern of M/s Reliance Big Entertainment (US) Inc. is tabulated as under:

S. No.	Particulars	Group	Share
	Reliance Interactive Advisors Private Limited (formerly known as AAA Entertainment Pvt Ltd and  First Connect Telecom Private Limited)	ADA Promoter Group	50%
	RBEP Entertainment Pvt Ltd (formerly known as Reliance Big Entertainment Pvt Ltd and AAA Interactive Media Pvt Ltd)	ADA Promoter Group	50%

Note: (RBEP Entertainment Pvt Ltd is the subsidiary of Reliance Interactive Advisers Pvt Ltd (97%). Hence, Reliance Interactive Advisers in their annual report have disclosed the consolidated shareholding in Reliance Big Entertainment (US) Inc at 97%). Refer AAA Entertainment Private Limited Standalone Financial Statements for period FY 2014-15 as Annexure X4.

• The financing of Reliance Big Entertainment (US) Inc was done by M/s Reliance Interactive Advisors Private Limited and M/s RBEP Entertainment Pvt Ltd. The source of fund in Reliance Interactive as per the details as under:

		As on 31 Mar 2015
S. No.	Particulars	Amount in Rs crore
	Reserves on amalgamation+	825.31
	Pref Shares Issuance to Reliance Innoventure	395.00
	Pref Shares Issuance to AAA Vibgyor Entertainment Pvt Ltd	251.00
	Current liability*	983.76
	Borrowing-LT	600.00
	Borrowing-ST	300.00
		3355.07

Note: ⁺Created on account of amalgamation of group company (merger order Annexure X5 & X6) Refer AAA Entertainment Private Limited Standalone Financial Statements for period FY 2014-15 As annexure X4.

^*Majorly constituting Reliance Big Entertainment Partner current account. AAA Entertainment Pvt Ltd, Swan Financial Management Pvt Ltd, Reliance Big Entertainment Pvt Ltd, RCAP Meditainment Ventures Pvt Ltd

• The details of investments from Reliance Interactive Advisors Private Limited is tabulated as under:

 

			As on 31 March 2015
S. No.	Particulars	Instrument	Amount
	Reliance big Entertainment US	Equity	4,84,640
	Reliance big Entertainment US	Pref	16,29,07,25,791
	Reliance big Entertainment US	Pref	1,13,27,21,916
	Reliance big Entertainment Singapore – Eq	Equity	9,04,14,824
	Reliance big Entertainment Singapore	Pref	2,83,77,57,128
	Equity to Reliance Big entertainment	Equity	7,80,48,78,049
	Reliance Transport and Travels Pvt Ltd	Equity	4,24,45,155
	Nandi Economic Corridor Enterprises Limited	Equity	65,04,22,500
	Loan to Related party	Loan	4,23,63,00,000
	Loan to others	Loan	4,62,85,41,708
	Total		37,71,46,91,711

Refer AAA Entertainment Private Limited Standalone Financial Statements for period FY 2014-15 as Annexure X4)

 

• A large portion of investment was made into Reliance Big Entertainment US INC which received a whopping sum of Rs 1630 crores only from Reliance Interactive Advisors Pvt Ltd. This money has flown to them since 2009-10 (Annual report of Reliance Interactive for 2009-10). The funds from Reliance Big Entertainment US INC has further been invested to M/s Dream Works II Holding Co., LLC.

 

• In the very first year of investment, expenses equivalent to almost total capital in M/s Dream Works II Holding Co., LLC were booked leading the company into negative net-worth category. (Balance sheet of Dream Works II Holding Co. LLC enclosed in Annexure X3).

 

• The important question arises, whether the Annual Performance Report (APR) for these investments were even filed. Even if it were, did RBI note and investigate how such large revenue expenses equal to capital investment in a foreign JV company was being booked and how that eroded the original value of investment in a foreign JV by an Indian entity down to almost nil values.

 

As per the Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, an Indian Investor has to file the APR with RBI. The APR has to be based on the audited books of the joint venture in which an Indian entity has invested. This places the onus of scrutinising these transactions on the RBI.

 

 

Schematic showing the fund and investment flows for Anil and Tina Ambani’s Hollywood project.

     

V. DUBIOUS ROUTING OF FUNDS TO INDIA BY ADA GROUP COMPANIES

Our investigation has unearthed dodgy transactions which potentially classify as money laundering under the PMLA that some of the ADA Group companies have been found indulging in since 2006. Some of these transactions also involved violation of FEMA. These transactions resulted in routing of around US$ 1535 million to India. The value of these funds stands at Rs. 13,047.50 crore at an average prevailing exchange rate of Rs. 85 per US dollar – though the value of the US dollar at that time was around Rs. 40 each. This was accomplished through offshore companies using an elaborate schematic, which is analyze next.

 

1. Potential Money Laundering On Pretext of FDI Automatic Approval Route

The government set up the automatic route to approve Foreign Direct Investment (FDI) with a view to ease rules of doing business. In the course of this investigation, we found the trail of one case where the ADA Group misused this provision and used it to pass around funds and roundtrip them through transactions that could potentially be money laundering and tax evasion. But the story of the transactions is a bizarre one.

At the heart of it is a US$750 million loan from a mysterious benefactor who disappears as do the borrowers. The money bounces around and lands in an ADA Group-promoter company.

• This was done through a company called Reliance Projects Pte Limited, set up in Singapore on July 26, 2006 by one Mr. NG Der Sian, while it was in a custody arrangement with Reliance Innoventure due to a nomenclature dispute.
• Reliance Projects Pte Limited was rechristened Emerging Market Investments & Trading Pte (EMITS) and its ownership was transferred to Reliance Innoventure Pvt. Ltd. to be transferred to Emerging Market Investment & Trading Unlimited (EMITU), a BVI-based company.
• In December 2007, NexGen Capital advanced a tidy sum of US$ 750 million to EMITS. This loan was supposedly meant for the Dadri power plant which never came to fruition.
• The entire fund was invested in compulsory convertible preference shares of AAA & Sons Enterprises Pvt. Ltd., a ADA Group entity on December 17, 2007. The funds were downstreamed the same day to AAA Facilities Solutions Pvt. Ltd. 2only to be further downstreamed to four more entities.
• These four companies were later on merged with Reliance Innoventure, the holding company of the ADA Group, in 2008–09 and 2009–10 to cover the tracks.
• This way, EMITS  which received US$ 750 million and the subsidiaries through which the funds were moved to Reliance Innoventure were made to disappear.

Now, let us discuss how all the events were orchestrated.

Two weeks after the Reliance ADA Group was formed on July 10, 2006, following the split of late Dhirubhai Ambani’s Reliance Industries Ltd, a person – let’s call him NG Der Sian –registered a company called Reliance Projects Pte Limited in Singapore with a capital of $1. As per the records and sources, the ADA Group reached out to this company and said that it could not use the name Reliance. There is no record that Reliance Industries Ltd., now headed by Mukesh Ambani, reached out to say the same. Following negotiations, Sian agreed to the demand and handed over the custody of shares and control of this Singaporean entity (Reliance Projects) to an ADA Group promoter company called Reliance Innoventure.  It was a temporary arrangement till Sian could change the name and fix the situation.

This custody business is in itself bizarre but it does not stop there. In the two years the ADA Group promoter company Reliance Innoventures had the custody of Reliance Projects (Singapore), a few more bizarre incidents occurred with this one-dollar company.

If the use of the name Reliance in Reliance Projects (Singapore) was the objection, it was rectified on November 22, 2007. The custody business should have ended there. Instead, a month later, a company called NexGen Capital gave a US$ 750 million loan to EMITS, formerly Reliance Projects (Singapore). It is not clear as to why the ADA Group company received a loan through bond issue in the company it had only in custody that too once the issue of similar name had been resolved by changing Reliance Project (Singapore)’s name to EMITS. This was in contravention of the advice Sian had given vide his letter forbidding any activity and transactions whatsoever in EMITS.

However, EMITS passed the funds to another ADA Group company called AAA & Sons Enterprises Pvt. Ltd. through investments in 29,509,275 compulsory convertible preference shares with a face value of Re. 1 per share for a premium of Rs. 999 each on December 17, 2007, aggregating to Rs. 2951 crore at the then prevailing exchange rate of Rs. 39.31 pre US$. A copy of the allotment advice of AAA & Sons Enterprises is enclosed herewith as Annexure 26.

AAA & Sons Enterprises Pvt Ltd was an investment firm and therefore the FDI into this company would require prior approval. Instead, the ADA Group firm treated the FDI brought in under the automatic route.

Following this, and in further violation of FDI norms, AAA & Sons Enterprises Pvt. Ltd. routed to AAA Facilities Solutions Pvt Ltd from where the funds were further invested into four subsidiaries of ADA Group promoter entity, Reliance Innoventure. This was done on the same day AAA & Sons Enterprises Pvt Ltd received the funds and in the following manner: 

 

S. No.	Name of the subsidiary company of Reliance Innoventures	Amount (in crore)
1.	AAA Communication Pvt. Ltd.	750
2.	AAA Enterprises Pvt. Ltd.	750
3.	AAA Power Systems Global Limited	601
4.	AAA Project Ventures Pvt. Ltd.	850
	Total	2951

(The relevant extracts of the annual report of these four subsidiaries of Reliance Innoventure are enclosed as Annexure 27.)

In FY 2008-09 and FY 2009–10, these four companies, along with the US$750 million from the mysterious NexGen Capital, were merged into Reliance Innoventures. (Copy of the merger order of High Court is enclosed as Annexure 28.)

On 1 June 2009, a company called Pollack Securities Corp advised Reliance Innoventure to transfer the shares of EMITS to another corporation called Emerging Market Investment & Trading Unlimited (EMITU) – a company registered in the British Virgin Islands, a known tax haven. (Relevant letter is enclosed as Annexure 29.) EMITU was initially incorporated on May 20, 2009 as Propus Investments Unlimited and the name change to EMITU was effected from July 27, 2009. The changes in name helped to create layers in the cross-border corporate veil. (Relevant instruction of EMITS for transfer of shares, EMITU incorporation certificate enclosed as Annexure 30.)

In a nutshell, here we have an abnormal case where both the remitter of the foreign exchange funds and the ADA Group companies where the money landed have been dissolved. Only the ultimate beneficiary exists.

The following flowchart illustrated the typical flow of funds downstream:

 

 

A timeline of the events is provided here for an easy comprehension:  

Date	Events
July 26, 2006	Reliance Projects Pte Limited is set up in Singapore by one Mr. NG Der Sian with a share capital of a share capital of US$ 1 only.
November 5, 2007	Letter written by Sian for changing the name of the entity. Meanwhile the company is placed under the custody of Reliance Innoventure
November 22, 2007	Name of the Singapore entity is changed to Emerging Market Investments & Trading Pte (EMITS).
December 20, 2007	Mr. Sian nominates Pallock Securities Corp to hold shares of EMITS
December 17, 2007	Meanwhile, EMITS borrows US$ 750 million from NexGen Capital through bonds to be redeemed in 2010.
December 17, 2007	EMITS invests the entire sum of US$ 750 million in AAA & Sons Enterprises Pvt. Ltd., an investment firm, on the same day the proceeds of the borrowing are received.
June 1, 2009	Pallock Securities Corp informs Reliance Innoventure, the custodian of EMITS, to transfer the shares to EMITU.
August 10, 2009	Shares of EMITS are transferred to EMITU.

Here are the violations:

• FEMA: No prior approval was taken for receiving offshore funds as FDI in an investment company.
• PMLA: Both the lender and the borrower are nonexistent, though the money has found beneficiaries.
• RBI’s NBFC guidelines on core functions of investment company, violated by the ADA Group companies.

However, here again no action was taken against the ADA Group companies for potential money laundering activity by law enforcement agencies including Enforcement Directorate whose mandate is to investigate such questionable transactions and bring the culprits involved to justice.

The value of US$ 750 million works out to be around Rs. 6375 crore at an average exchange rate of Rs. 85 per US dollar at the 2025 rates.

 

B. Dubious Routing of Funds by Reliance Natural Resources and Reliance Infra Raise in External Borrowing

Cobrapost has unearthed two more instances where funds worth US$ 575 million were diverted to India by Reliance Natural Resources Limited (RNRL) and Reliance Infrastructure. These funds were part of US$ 660 million raised abroad in the form of loans/bonds, which were routed to India in contravention of FEMA and then channelled to offshore entities to finally write the amounts off. The modus operandi was almost the same as deployed before. Here is what our investigation has found:

• On October 17, 2006, Reliance Infrastructure diverted to India US$ 275 million of US$ 300 million it had raised in external commercial borrowing. The funds were invested as liquid funds in Reliance Mutual Fund only to be transferred abroad to Reliance Natural Resources (Singapore) Pte Limited and written off.
• Another big tranche of US$ 300 million was diverted to India in a similar manner by Reliance Infrastructure. This was part of out of US$ 360 million the company had raised in external commercial borrowings. After fund was diverted to India,  it was deployed again as liquid funds in Reliance Mutual Fund in November 2006. The fund was later siphoned off to Gourock Ventures, a company based in the British Virgin Islands.
• The remaining US$ 60 million of the external borrowings was directly diverted to Gourock Ventures.
• Another tranche of US$ 150 million raised in external commercial borrowing was also diverted to India. This was meant for a delsulphurization process supposedly to be conducted at another power plant. The RBI rejected a petition for the compounding of offence under FEMA against this transaction.
• This way US$ 1535 million landed in the above-mentioned ADA Group companies in a fraudulent manner. 

Let us go back in time. On January 27, 2004, Anil Ambani announced his company Reliance Natural Resources would to set up a  3500 MW gas-fired power plant at Dadri of Uttar Pradesh, the largest in the private sector. The plant was estimated to cost Rs. 10,000 crore. In 2006, Reliance Natural Resources Limited borrowed a sum of US$ 300 million in the form of foreign currency convertible bonds (FCCBs) – to be listed on Singapore Stock Exchange – for the plant. Another round of funding worth US$ 360 million was secured in a similar manner. These funds, mentioned as capital expenditure towards the project allowed under the automatic route for FDI, were meant for building a pipeline to transport natural gas from KG Basin off Andhra Pradesh to Dadri.

The project never took off.

However, the ADA Group companies once again saw an opportunity here to pull off another fraud. US$ 275 million of the external commercial borrowings (ECBs) was repatriated to India on October 17, 2006 and the proceeds were invested in liquid funds of Reliance Mutual Fund. This was done in flagrant violation of the end-use restrictions of ECBs under FEMA. After some time, the funds in their entirety were transferred to Reliance Natural Resources (Singapore) Pte Limited, a shell entity wholly owned by RNRL, in the form of equity and preference shares. Later on, the entire transaction of US$ 275 million was written off/provided for in the books of Reliance Power in respect of the Singapore entity in FY 2018–19, leaving the burden on Reliance Power, and in turn its shareholders, to repay/convert FCCB (annual report of Reliance Natural Resources (Singapore) Pte Limited for FY 2018-19 and FY 2019-20 enclosed as Annexure 31 & 32). The annual report of Reliance Power Limited for FY 2018-19 (refer to page 163), the annual report for FY 2019-20 (page 177), and the annual report for FY 2020-21 (page 197) show the write-off from the Indian listed entity of the ADGA Group (Annexure 33, 34 and 35).

The movement of funds is explained in the flowchart below:

 

What is more surprising is the fact that the Singapore entity does not have any business to show, yet it was advanced a sum as big as US$ 275 million. The transaction involved a potential violation of the money laundering law. Although the Enforcement Directorate took note of this violation to initiate the proceedings against some ADA Group companies, the anti-money laundering watchdog developed cold feet sooner than later and pigeon-holed the proceedings.

In yet another instance, Anil Ambani’s Reliance Infrastructure (formerly Reliance Energy) diverted another tranche of US$ 300 million to India out of US$ 360 million the company raised in external commercial borrowings abroad for the still-born Dadri power project in November 2006. The funds repatriated to Reliance Infrastructure were again deployed as liquid funds in Reliance Mutual Fund. About five months later in April 2007, the entire amount was withdrawn and invested in Reliance Fixed Horizon Fund to be finally siphoned off to Gourock Ventures Limited for investment, a company based in the British Virgin Islands, in March 2008. The balance US$ 60 million was also directly diverted to Gourock Ventures. So, the total amount diverted in this manner stood at US$ 360 million. Here again, Gourock Ventures was rechristened Reliance Infra Projects International Limited only to be baptised again with a new nomenclature of Oxagon International Limited (refer to annual report of Reliance Infrastructure for FY 2008-09 and FY 2024-25 enclosed as Annexure 36 & 37, page 66 and 176, respectively). 

The funds raised in the form of external commercial borrowings and routed to Reliance Infrastructure were invested in the form of 3,60,000 cumulative non-convertible redeemable preference shares of the British Virgin Islands company. The shares have been gradually written off in the financial statement and the entire amount has been provided for in the books of Reliance Infrastructure in FY 2022–23, thus causing a massive loss to shareholders of Reliance Infrastructure and leaving the debt burden on them  (page 120, Annexure 38).

It is surprising to note that Reliance Infrastructure has in its books not disclosed the British Virgin Islands company as a subsidiary. Curiously, the end use of the external borrowings was never ensured by Reliance Infrastructure in contravention of the FEMA rules and RBI guidelines.

Apart from siphoning off US$ 360 million raised abroad in external borrowings, the ADA Group company raised another tranche of US$ 150 million in external commercial borrowing. This came to light in 2008 when the group filed an application with the RBI for compounding of offences under FEMA. In July 2008, after filing an application for compounding, the ADA Group company told the RBI that the money was invested in its mutual fund, which was against FEMA rules, because the Dadri power project was delayed. More interestingly, while this application was pending with the RBI, the group applied for its withdrawal in August 2008. It wanted to submit a fresh application by including another tranche of US$ 150 million raised in the form of external borrowing. This sum of US$ 150 million was purportedly raised abroad for desulphurization of flue gas.   

The RBI dismissed its explanation as well as its plea to include the second FEMA violation while asking the company involved to file a separate application. Under the FEMA, the company was liable to pay a penalty which could go thrice the sum involved. However, the RBI took a very lenient view and instead of directing the company to pay a penalty of Rs. 3798 crore for dubious foreign currency transactions totaling US$ 450 million, it asked Reliance Infrastructure to pay only the total financial gain of Rs. 124.68 crore in compounding fee for violating the FEMA rules. The order was signed on August 27, 2008 by then RBI Chief General Manager Salim Gangadharan (Annexure 39).

It is surprising to note that the central bank did not ask about the source of funds and the ultimate use of funds. It did not alert, either, other agencies such the Enforcement Directorate and seek an inquiry into these fraudulent transactions involving offshore funds let alone seek criminal prosecution against the ADA Group companies involved in the act. According to RBI's 2011 Master Circular on Compounding of Contraventions, the central bank can "refer the matter to the Directorate of Enforcement for necessary action" under FEMA if there is sufficient reason for further investigation (Annexure 40). They simply let them and their ultimate beneficial owner Anil Ambani off the hook with a light rap on the knuckles. This deliberate abdication of responsibility is symptomatic of a much deeper systemic rot which permeates almost all institutional frameworks. (We are providing here a list of 500 companies which can be downloaded from the MCA website by anyone wishing to further deep dive into the ADA Group companies. We cannot provide extensive data dumps as it is prohibited by regulation. The list is enclosed as Annexure 41.) 

A summary of the flow of funds is provided in the chart below for easy understanding:

 

Interestingly, the ADA Group went to town claiming that it was unable to raise money for its Dadri power project because of the on-going litigation over gas-pricing with his sibling’s Mukesh Ambani’s group.

    

VI. THE FRANKLIN TEMPLETON DEBACLE

In April 2019, three ADA Group companies reached a standstill agreement with Franklin Templeton India, which had pumped in more than Rs. 1000 crore in mutual funds, after secured NCD default. This led to SEBI changing mutual fund regulation of reducing unlisted NCDs exposure to 10 percent and making standstill agreement void. As a result, Franklin Templeton India didn't sell the pledged securities and wound up six debt funds valued at Rs. 27,508.14 crore in April 2020, affecting 300,000 investors.

 

VII. FLEECING CHINESE BANKS

Anil Ambani's companies turned every single dime he borrowed from not only from Indian lenders but also his foreign creditors into a non-performing asset. In yet another example, he borrowed US$ 925 million from three Chinese banks, namely, Industrial & Commercial Bank of China, China Development Bank and the Export-Import Bank of China, for Reliance Communications on personal guarantee in 2012.   

The banks dragged Anil Ambani to a London court over a US$ 680 million default. When the court asked him to set aside US$ 100 million in February 2020, Anil Ambani instead claimed his worth was zero and refused to pay. The dispute continues in the court.

VII. EROSION OF INVESTORS’ WEALTH

In view of the massive diversion of funds and poor management, there is no surprise that the spectacular growth the ADA Group saw in the next decade after it came into existence turned into a nightmare for both its creditors and its investors. The market capitalization of ADA Group companies, which stood at a staggering Rs 1,65,917 crore in January 2008, nosedived to a paltry Rs 6196 crore in June 2019, with investors losing Rs. 1,59,721 crore of their wealth in between.

The erosion of the shareholders' wealth can be gauged from the table provided here which illustrates share prices of various ADA Group companies in the initial years and their value in 2024:

			Rs per share
S. No.	Company	Peak share price	Current (Prices in 2024)
	Reliance Capital	2222.26 (1 Dec 2007)	(26 Feb 2024)
	Reliance Home Finance	104.40	(07 Mar 2024)
	Reliance Infrastructure	2641.00 (08 Jan 2008)	1.05
	Reliance Nippon	542.85
	Reliance Power	285.47 (26 Feb 2008)	(07 Mar 2024)
	Reliance Naval	119.70 (Aug 2010)	(13 Jul 2023)
	Reliance Communication	40.31 (31 Oct 2007)	0.070

 

It is apparent from the table that the scrips of all the major ADA Group companies have lost their sheen, so has the promise they once held for investors. Reliance Infrastructure, the star performer on the bourses, was traded at Rs. 2641 per share in January 2008, whereas its value stood at Rs. 1.05 in 2024. Similarly, Reliance Capital, which once hit the peak share price of Rs. 2222.26 in December 2007, was traded at Rs. 12.35 in February 2024. The scrip of other companies listed in the table have also hit rock bottom, thus summing up the ADA Group's trajectory from a promising  sounding board for investors, both institutional and individual, to a bubble that was bound to burst sooner than later. The only ADA group company in reckoning on the Indian bourses is Reliance Infrastructure, and those which have been acquired through CIRP process might be faring well.   

Indictment by SEBI: The only agency which seems to have acted against Anil Ambani and two of his companies, Reliance Home Finance Ltd. and Reliance Commercial Finance Ltd., is SEBI which launched an investigation into diversion of funds by Reliance Home Finance. In its order passed in August 2024 after an investigation, SEBI flagged several serious anomalies and procedural lapses in corporate loans worth about Rs. 6187 crore Reliance Home Finance had granted to 62 entities. Interestingly, the SEBI investigation which found the loan disbursals fraudulent drew heavily from the forensic audit reports of the Bank of Baroda and another report PricewaterhouseCoopers had submitted after resigning as the statutory auditor of the company in June 2019. Holding Anil Ambani, RFHL's key management personnel, and 22 companies – many of them related ADA Group companies – accountable for the fraud, the market regulator slapped each a penalty running an upward of Rs. 25 crore.

However, the watchdog failed to see the fraudulent diversion of funds beyond RHFL and did not broaden the ambit of its investigation to include Reliance Capital, RFHL's holding company, and other related entities implicated in its investigation such as Reliance Commercial Finance Ltd. and Crest Logistics & Engineers Pvt. Ltd., rechristened CLE Pvt. Ltd. It may be recalled that the SEBI had slapped Reliance Commercial Finance Ltd. with a penalty of Rs. 25 crore around the same time in a matter related to RHFL.

SEBI could have referred the case, given the serious nature of the fraud, to central investigating agencies such as the Serious Fraud Investigation Office, Economic Offences Wing or the Central Bureau of Investigation. It could have also initiated criminal proceedings against Anil Ambani, the key management personnel, and the companies involved under various provisions of the Companies Act of 2013 (Section 447) and Bharatiya Nyay Samhita (Sections 197, 212, 318(a), 336(3), 316(5), and 344), which specifically deal with fraudulent diversion of funds.

In conclusion, our investigation underlines not only the failure of regulatory bodies, including the Reserve Bank of India and the SEBI, but also the failure of law enforcement agencies such the Enforcement Directorate, the Central Bureau of Investigation, and Serious Fraud Investigation Office of the Ministry of Corporate Affairs. All these agencies rather chose to twiddle their thumbs. The lending banks too failed to act decisively and invoke guarantees or enforce security interest to recover their dues while all major ADA Group companies kept on piling public debt. Their failure to act is spectacular in the sense that they chose to turn a Nelson's eye when the ADA Group companies had begun to bleed by 2016 and defaulting on repayment of loans. It took the banks almost a decade to declare Anil Ambani a willful defaulter the RBI's 2013 Master Circular notwithstanding. An essential element of the RBI circular defines who is a willful defaulter is siphoning off funds and fraudulent transactions. Whatever action certain banks are taking is too little too late.

 

 

DISCLAIMER:

This story is based on multiple official and public third-party sources, including statutory orders; regulatory filings and documents published by the Ministry of Corporate Affairs, the Securities and Exchange Board of India, the National Company Law Tribunal (NCLT), and the Reserve Bank of India; reports published by established media outlets; information provided by sources; and court orders. Every effort has been made, in good faith, to be complete and meticulous in extracting, collating, interpreting, and verifying the said information in the interests of our readers and the public. Despite best efforts, if any inadvertent and unintentional errors remain, we request you to contact us on contact@cobrapost.com to enable us to rectify them immediately.