Cobrapost Alleges ₹28,874 Crore Financial Fraud by Reliance ADAG Group

Investigative portal Cobrapost has accused the Reliance Anil Dhirubhai Ambani Group (ADAG), led by Anil Ambani, of a substantial financial fraud totaling over ₹28,874 crore. The alleged scam, reportedly ongoing since 2006, involves the diversion of funds from six listed companies: Reliance Infrastructure Limited, Reliance Capital Limited, Reliance Communications Limited, Reliance Home Finance Limited, Reliance Commercial Finance Limited, and Reliance Corporate Advisory Services Limited. Cobrapost claims these funds were siphoned off through bank loans, Initial Public Offering (IPO) proceeds, and bond issuances. Aniruddha Bahal, founder-editor of Cobrapost, stated the findings are based on an extensive analysis of regulatory filings and public records. The Reliance Group vehemently refuted these claims, terming them "false, mischievous and motivated" and part of a "corporate rivals’ campaign." They also asserted that the information presented by Cobrapost is old, misrepresented, and taken out of context, having already been examined by various statutory authorities. The investigation details how funds were allegedly routed through a complex network of subsidiaries, Special Purpose Vehicles (SPVs), and offshore entities in jurisdictions like the British Virgin Islands, Cyprus, and Singapore, ultimately leading to Reliance Innoventure Private Limited. The total alleged fraud, including domestic and offshore diversions, is stated to be over ₹41,921 crore. The report also mentions the alleged use of diverted funds for personal expenses, such as purchasing a luxury yacht. Impact: This news could significantly impact investor sentiment towards the Reliance Group and potentially other listed companies if similar alleged practices are uncovered. It raises serious concerns about corporate governance and financial oversight in India, potentially leading to increased scrutiny from regulatory bodies and a sell-off in affected stocks. Rating: 8/10

Heading: Difficult Terms SPV (Special Purpose Vehicle): A legal entity created for a specific, limited purpose, often used to isolate financial risk. IPO (Initial Public Offering): The first time a company sells shares of stock to the public. SEBI (Securities and Exchange Board of India): India's capital markets regulator. NCLT (National Company Law Tribunal): A quasi-judicial body in India that deals with corporate and bankruptcy matters. RBI (Reserve Bank of India): India's central bank, responsible for monetary policy and banking regulation. CBI (Central Bureau of Investigation): India's premier investigative police agency. ED (Enforcement Directorate): An Indian law enforcement agency responsible for enforcing economic laws and fighting economic crime. Offshore Entities: Companies registered and operating in a foreign country, often to take advantage of different regulations or tax laws. Shell Firms: Companies that exist on paper but have no significant assets or operations, often used for illicit financial activities. Money Laundering: The process of making illegally obtained money appear legitimate.