Cobrapost Alleges Rs 41,921 Crore Fraud by Anil Ambani's Reliance Group; Group Denies Charges

Investigative portal Cobrapost has released a report alleging that Anil Ambani's Reliance Group committed financial fraud exceeding Rs 41,921 crore. According to the report, this amount was diverted from group companies like Reliance Communications, Reliance Capital, and Reliance Home Finance between 2006 and now. Funds were allegedly siphoned off from bank loans, IPO proceeds, and bonds and routed to promoter-linked companies.

Cobrapost further claims that an additional USD 1.535 billion (Rs 13,047 crore) was fraudulently brought into India through offshore entities in various countries, using a network of subsidiaries and shell firms, a transaction that could potentially amount to money laundering. The investigation reportedly cites violations of several Indian laws, including the Companies Act, FEMA, PMLA, SEBI Act, and Income Tax Act, and also alleges misuse of corporate funds for personal luxury items, such as a USD 20 million yacht. The report concludes that these diversions led to financial distress for six key listed companies.

Reliance Group has vehemently dismissed these allegations, labeling the report as a "malicious campaign" and a "corporate hit job" by a "dead platform" with commercial interests in acquiring group assets. The group stated that the allegations are based on old, publicly available information and represent an organized attempt to prejudice fair trials. It accused the publication of disinformation and character assassination aimed at crashing stock prices and engineering panic to acquire assets like Delhi's BSES Ltd, Mumbai Metro, and the Rosa power project.

Impact This news can have a significant negative impact on the stock prices of Reliance Group companies, potentially leading to increased volatility and investor caution. It could also trigger fresh regulatory investigations and affect market sentiment towards large conglomerates. Rating: 8/10.

Difficult Terms: Financial fraud: Dishonest and illegal activity involving money, such as deception or misrepresentation, to gain financial advantage. Diversion of funds: Transferring money from its intended or legitimate use to another, often unauthorized or illicit purpose. IPO proceeds: Funds raised by a company from selling its shares to the public for the first time through an Initial Public Offering. Shell firms: Companies that exist only on paper and have no significant business operations, often used to hide ownership or facilitate illegal financial transactions. Offshore entities: Companies incorporated in a different country from where their main business operations are conducted, often used for tax or regulatory advantages. Money laundering: The illegal process of making large amounts of money generated by criminal activity appear to have come from a legitimate source. Pass-through entities: Business structures that are not taxed separately; income and losses are passed through to the owners. SPVs (Special Purpose Vehicles): Legal entities created for a specific, limited purpose, such as to isolate financial risk. Market capitalisation: The total market value of a company's outstanding shares of stock. Bad loans: Loans that are unlikely to be repaid. Malicious campaign: An organized effort to harm someone's reputation or business through deliberate and harmful actions. Corporate hit job: An operation designed to damage the reputation or business of a company, usually for competitive or financial gain. Calumny: False and slanderous statements. Disinformation: False information deliberately and maliciously disseminated.