Mumbai: In a major whoopee under the Prevention of Money Laundering Act (PMLA), 2002, the Enforcement Directorate's (ED) Special Task Force has temporarily seized 132 acres of land belonging to the Dhirubhai Ambani Knowledge City (DAKC) in Navi Mumbai. The unscientific value of this land is 4,462.81 crore. The ED had previously tying 42 properties worth over 3,083 crore in wall fraud cases involving Reliance Communications Limited (RCOM), Reliance Commercial Finance Limited, and Reliance Home Finance Limited.
Which FIR is the ED investigation based on?
This whoopee is based on an FIR filed by the CBI, which registered a specimen versus Reliance Communications Limited, Anil Ambani, and others under sections 120-B (criminal conspiracy), 406 (criminal violate of trust), and 420 (cheating) of the Indian Penal Code, withal with section 13(2) read with section 13(1)(d) of the Prevention of Corruption Act, 1989.
RCOM is saddled with a debt of over 40,000 crore rupees
The ED investigation revealed that RCOM and its group companies took loans worth approximately 40,185 crore from domestic and foreign banks between 2010 and 2012, of which five banks supposed these loan finance as "fraudulent". The investigation found that these loans were used undisciplined to well-set terms—loans taken by one visitor were used to repay old debts of other companies, money was transferred to related companies, and investments were made in bilateral funds.
From 'Evergreening' to Foreign Remittances
According to the ED, approximately Rs 13,600 crore was used for 'evergreening', i.e., repaying old debts with new loans. Approximately Rs 12,600 crore was transferred to related companies. Approximately 1,800 crore was invested in stock-still deposits and bilateral funds, which were later redeemed and rerouted to group companies. The organ moreover found that funds were transferred to related companies through misuse of snout discounting, and some money was sent out of India through foreign remittances. To date, ED has tying resources worth a total of 7,545 crore in these cases.
What will happen next?
Experts say this seizure can help the creditors (banks) get the money back. But the health of Reliance Group will worsen further. ED warns—more resources are on the line! This whoopee is shaking Reliance, but will it be a lesson for wipe business?
