New Delhi: Investigative news organisation Cobrapost held a press conference on Thursday (October 30) at the Press Club of India in New Delhi, in which it claimed to have unearthed a massive banking fraud of Rs 28,874 crore committed by the Anil Ambani-owned Reliance Anil Dhirubhai Ambani Group (Reliance ADAG), apart from other allegedly illegal transactions.

The Cobrapost investigation, according to its editor Aniruddha Bahal, shows Reliance ADAG raised loans from public and private sector banks, and through initial public offerings (IPOs) and bonds, then allegedly diverted these funds through shell companies and offshore entities to promoter group companies.

"What we found is not just mismanagement but clear fraud," Bahal told journalists. "From the start, when Anil Ambani raised money from IPOs, bonds or public sector banks, the funds were diverted to shell companies and then routed back to his own holding firms. This shows a deliberate plan to cheat his own companies and make personal gains," he said.

"A forensic analysis reveals how a fraud worth about Rs. 28,874 crore was pulled off by Reliance ADA Group companies owned by Anil Ambani. They committed the fraud by siphoning off funds borrowed from public sector banks and investors and diverting them to promoter-group companies," the report, which Bahal cited at the press conference, says.

With Bahal were Supreme Court senior advocate Prashant Bhushan, senior investigative journalist Paranjoy Guha Thakurta, Newslaundry co-founder Abhinandan Sekhri and journalist Ushinor Majumdar.

In response to Cobrapost's report, Reliance ADAG has issued a statement strongly denying all the allegations, and calling the claims "malicious, baseless and motivated".

Published under Bahal's name, the report cites its numerous sources of information: "Our investigation is based on a thorough analysis of multiple official and public third-party sources. These include statutory orders, regulatory filings and documents published by the Ministry of Corporate Affairs, the Securities and Exchange Board of India (SEBI), the National Company Law Tribunal (NCLT), and the Reserve Bank of India; court orders; documents filed in foreign jurisdiction; and information available in public domain. We have been as meticulous and diligent as possible in extracting, collating, interpreting and verifying the data from all these sources."

Bahal told the media, "We [Cobrapost] are starting a series of investigations on big Indian business houses, calling them the “lootwalas” – those who loot their own people. The first investigation focuses on the Anil Ambani-led Reliance ADA Group."

He alleged that ADAG caused heavy losses to investors and banks, according to the findings of his investigation, and delivered a presentation on how the group allegedly carried out what he called a "massive fraud" and
"misused taxpayers’ money".

Bahal added, "This pattern is visible in all ADA Group companies. Because of this, Anil Ambani’s group caused a total public money loss of about Rs 3.38 lakh crore through unpaid bank loans and a fall in market value. It was a simple but damaging process – borrow money, move it through fake companies, bring it back to yourself and then stop paying the banks."

The Cobrapost report says, "According to the data provided by the NCLT, nine companies of the ADA Group had an outstanding of Rs. 1,78,491 crore in unpaid loans, or admitted claims in banking parlance, when they were put under the hammer. If we put together Rs. 1,78,491 crore in unpaid loans and Rs. 1,59,721 crore that lakhs of investors of these companies have lost since 2008, a staggering sum of Rs. 3,38,212 crore of public money has vanished in thin air...."

After Bahal’s presentation, the other speakers raised the question of how the alleged financial irregularities uncovered by Cobrapost could continue despite the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI), which were set up to probe money laundering and other forms of financial frauds.

Addressing reporters, Bhushan strongly criticised the ruling government and the financial regulatory bodies for allowing "illegal financial activities". He said, "This country is being allowed to be systematically looted and plundered by giant corporates like [that of] Anil Ambani. The modus operandi broadly was that they used to take large amounts of loans from the banks."

Also read: How SEBI, RBI and IRDAI Turned a Blind Eye for Years as Reliance Capital Crumbled

"It was the banks’ job to keep track of how the funds were being distributed and spent. What were they doing for more than 15 years? Were they soft-pedalling this because of pressure from the ruling government? This fellow [Anil Ambani], who has so transparently siphoned out Rs 40,000 crore, is roaming around freely and not being arrested by the CBI or the ED," Bhushan said. He added, "Obviously, there is a reason for the government to be protecting him. What does he have on the government or the prime minister? Why is this happening?"

In response, Reliance ADAG claimed that the Cobrapost investigation was funded by its "corporate rivals", who are seeking to crash its stock and acquire assets at throwaway rates. The group also said the Cobrapost report recycles old, publicly available information, already examined by agencies like the CBI, the ED and the securities regulator, SEBI. The group said in a statement that it has already complained to SEBI and sought a probe into suspicious trading activity.

Also read: ED Begins PMLA Investigation Against Anil Ambani's Reliance Group Companies

Guha Thakurta said at the press conference, "Until last evening [October 29], when the legal notice was sent to Aniruddha Bahal, I had no idea the group under investigation was the Anil Dhirubhai Ambani Group. It is now up to the government’s investigative agencies – the ED, the CBI, SEBI and others – to verify whether the information presented is accurate. If it is false, action should be taken, but branding a journalist as an extortionist or blackmailer is unacceptable."

Thakurta said, "Defamation laws are being misused to intimidate and silence reporters. The modus operandi of such corporates – shell companies, tax havens, constant name changes and circular fund transfers – has continued unchecked for years. If the ruling government is serious about tackling corporate fraud, it must act on these findings instead of waiting for Cobrapost journalists like Bahal to expose them."

According to its report, Cobrapost examined six Reliance ADAG companies, all of whom, it claims, are "in the red" and allegedly managed to "siphon off" Rs 28,874.07 crore – even as lakhs of crores were "routed to India in a dodgy manner". It alleges: "In addition [to the Rs28,874.07 crore] funds to the tune of around US$ 1.53 billion landed from abroad in his companies in a dubious manner."

The Cobrapost investigation, "Lootwallahs", which claims to explain how many of these transactions were conducted, is accessible here.

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