Winning Bizness Desk

Mumbai.The Central Bureau of Investigation has registered a fresh case against Anil Ambani and Reliance Communications on charges of cheating Life Insurance Corporation of India of around ₹3,750 crore. The action follows a complaint by LIC, with the agency alleging that the company and its top management misled the insurer into making large investments based on false financial claims.

Fourth case against Ambani and RCom so far

This is the fourth case filed by the CBI against Reliance Communications and Anil Ambani. The FIR includes charges of criminal conspiracy, cheating and provisions under the Prevention of Corruption Act. Investigators say there was a planned effort to secure funds by presenting an inflated and misleading financial position of the company.

LIC persuaded to invest through false disclosures

According to the probe, between 2009 and 2012, Reliance Communications convinced LIC to invest nearly ₹4,500 crore in non-convertible debentures. The agency alleges that the company provided incorrect information about its financial health and offered security assurances that were not backed by actual assets. These claims played a key role in securing the investment.

Forensic audit reveals fund diversion patterns

A forensic audit conducted by BDO India LLP, submitted on October 15, 2020, highlights several irregularities. Key findings include:

• Funds raised from banks and institutions were diverted from stated purposes
• Multiple subsidiaries and shell entities were used to route money
• Fake billing practices were used to withdraw funds
• Artificial receivables were created and later written off

These findings form the backbone of the CBI’s case, pointing to a structured misuse of borrowed funds.

Assets overstated, financial picture allegedly distorted

The audit report further states that Reliance Communications inflated the value of its assets. There was little or no real linkage between the declared assets and the loans raised against them. Investigators believe this mismatch helped the company project strength and secure investments. The alleged fraud has resulted in losses exceeding ₹3,750 crore for LIC.

What are non-convertible debentures explained simply

Non-convertible debentures are loan instruments issued by companies to raise money from investors. They offer a fixed rate of interest but cannot be converted into shares. In this case:

• LIC invested in NCDs expecting steady returns
• The investment was based on claimed asset backing
• The risks were understated at the time of issue

The case is expected to deepen scrutiny of corporate borrowing practices and the role of large institutional investors in due diligence.