Anil Dhirubhai Ambani group (ADAG) stocks — Reliance Infrastructure and Reliance Power — issued a clarification of a similar nature to the exchanges that the action by the State Bank of India (SBI) on the Reliance Communications loan account is unlikely to have any impact on them.
Their statements came after India’s biggest bank, SBI, classified the loan account of insolvent Reliance Communications as fraudulent, citing alleged diversion of funds in a case dating back to 2016.
According to Indian banking laws, once an account is reported as a fraud, the matter is referred to enforcement agencies for criminal action, and the borrower is barred from securing further finance from banks and other institutions for at least five years.
Reliance Communications disclosed that its total debt stood at ₹40,400 crore ($4.71 billion) in March, according to a Reuters report. SBI’s letter also said it would report Anil Ambani, the director at Reliance Communications, to the Reserve Bank of India, in compliance with Indian banking regulations.
Ambani is pursuing the matter as legally advised, a spokesperson for Reliance Communications said on Wednesday.
Reliance Infra, Reliance Power clarify
Against this backdrop, both companies claimed that SBI’s action will have “absolutely no impact on business operations, financial performance, shareholders, employees, or any other stakeholders”.
