The Central Bureau of Investigation has registered an FIR against Reliance Capital, its former chairman Anil Ambani, former group managing director Satish Seth and others following a complaint by the Life Insurance Corporation of India.
According to the CBI case, LIC had invested a total of ₹3,900 crore in five non-convertible debentures issued by Reliance Capital between April 2012 and March 2018. LIC has alleged that the funds were subsequently diverted or misused, resulting in an alleged wrongful loss of ₹2,684.57 crore.
The investments were reportedly made for purposes including general corporate requirements, funding needs and refinancing of existing debt.
The allegations include cheating, criminal breach of trust, criminal misconduct, diversion or misappropriation of funds and falsification of accounts. The CBI investigation will examine the alleged conspiracy, the roles of individuals and public servants named in the complaint and the ultimate use of the invested money.
Anil Ambani has denied wrongdoing. A statement from his spokesperson said the FIR relates to Reliance Capital and noted that Ambani had served as a non-executive director and chairman of the company’s board until November 2021, when the Reserve Bank of India superseded the board and appointed an administrator.
The investigation comes against the background of several earlier cases involving companies associated with the Reliance Anil Dhirubhai Ambani Group. The CBI has said that it previously registered multiple FIRs involving companies including Reliance Communications, Reliance Capital, Reliance Home Finance, Reliance Commercial Finance and Reliance Telecom.
The agency has also said that chargesheets have already been filed in several of those cases.
Importantly, the present matter remains an investigation and the allegations have not been established in court.
The case could receive considerable attention because LIC is India’s largest life insurer and a major institutional investor. Questions concerning the management of investments made by such institutions can have wider implications for corporate governance, financial regulation and accountability.
The CBI’s investigation is expected to focus on documentary evidence, financial transactions and the alleged end-use of funds.
Why it matters: The case involves a major public-sector financial institution, thousands of crores in investments and allegations concerning the handling of institutional funds.