The Central Bureau of Investigation (CBI) has arrested Devang Mody, former Director and Chief Executive Officer of Reliance Commercial Finance Limited (RCFL), and Ravindra Sudhalkar, former Executive Director and Chief Executive Officer of Reliance Home Finance Limited (RHFL), in connection with its ongoing investigation into the Reliance Anil Dhirubhai Ambani (ADA) Group cases.
Losses to Public Sector Banks
According to the CBI, the alleged fraud in the RCFL case caused a loss of Rs 4,097 crore to 13 public sector banks, while the RHFL case resulted in a loss of Rs 3,526 crore to 10 public sector banks. The combined wrongful loss amounts to Rs 7,623 crore.
Role of the Arrested CEOs
The investigation revealed that Mody, who served as CEO of RCFL from April 2017 to December 2018, was a key decision-maker responsible for the company’s operations. The agency alleged that he approved loans to intermediary and conduit companies despite being aware that such lending was contrary to RBI guidelines and the sanction conditions governing borrowings from public sector banks.
Similarly, Sudhalkar, who served as Executive Director and CEO of RHFL from October 1, 2016, to March 31, 2022, allegedly approved loans to intermediary and conduit companies in violation of the company’s lending policies, NHB/RBI guidelines and conditions attached to borrowings from public sector banks.
Diversion of Funds
The CBI alleged that the accused diverted funds borrowed by RCFL and RHFL to Reliance ADA Group companies, including Reliance Capital Ltd., Reliance Infrastructure Ltd. and Reliance Power Ltd., causing a combined wrongful loss of Rs 7,623 crore to the lending banks and corresponding wrongful gain to themselves and related entities.
Ongoing Investigations
The agency has registered seven FIRs against Reliance Communications Limited (RCom), Reliance Home Finance Limited (RHFL), Reliance Commercial Finance Limited (RCFL) and Reliance Telecom Limited (RTL) on the basis of complaints received from various public sector banks and LIC. The cases are under investigation and are being monitored by the Supreme Court.
The CBI recently filed its first chargesheet in the RCom case on May 29 against 16 accused persons, including the company, five senior RCom executives and 10 bank officials. With the latest arrests of Mody and Sudhalkar, the CBI has so far arrested five persons in connection with the Reliance ADA Group cases.
