Following the State Bank of India, Bank of India designated the loan account of the bankrupt Reliance Communications as fraudulent and named Anil Ambani, the former director, in a regulatory filing, citing alleged financial diversion in 2016.
In August 2016, RCom received a Rs 700-crore loan from Bank of India to cover its continuing capital and operating expenses as well as the repayment of its outstanding debts. According to the bank’s letter that RCom revealed in a stock exchange filing, half of the sanctioned sum released in October 2016 was invested in a fixed deposit, which was prohibited by the sanction letter.
The Bank of India decided “to classify the loan accounts of the company, Anil Dhirajlal Ambani (promoter and former director of the company), and Manjari Ashok Kacker (former director of the company), as Fraud,” according to a letter that RCom received on August 22 from the bank on August 8.
SBI had already taken the same action in June of this year, claiming that bank funds had been embezzled through transactions that went beyond the terms of the loans.
