CBI arrests ex-Reliance Communications Group MD Amitabh Jhunjhunwala in Rs 2,929 crore loan fraud case

MUMBAI: The CBI on Monday arrested Amitabh Jhunjhunwala, former Group Managing Director of Reliance Communications Group in a bank loan fraud case related to the Reliance ADA Group. Earlier in the day, a special court permitted the investigating agency to formally arrest Jhunjhunwala who was brought to the city by Tihar jail officials on a transit remand. Jhunjhunwala was in judicial custody in a case being investigated by the Enforcement Directorate, Delhi, and was lodged the jail there. He was transferred from the judicial custody of a special judge at Rouse Avenue Court in New Delhi. Jhunjhunwala will be produced before the special CBI court for his remand hearing on Tuesday. The case pertains to the alleged misuse of the Rs 1,200-crore term loan sanctioned by the State Bank of India, the Rs 500 crore Letter of Credit facilities sanctioned by Bank of Maharashtra, and the Rs 350 crore Letter of Credit facilities sanctioned by the erstwhile Syndicate Bank.It is the CBI’s case that Jhunjhunwala was looking after corporate finance, banking and utilization of funds. It was also submitted that he was the main person who dealt with senior formations of the bank for loans and advances. The CBI through special public prosecutor A Limosin submitted that due to misutilization of loan funds, the banks suffered wrongful losses. It was further alleged that Jhunjhunwala was instrumental in getting loans from various banks and as the companies did not repay the amount, the accounts became Non Performing Assets. “He was taking instructions from the promoters and directors of the Reliance Communications Group companies,” the CBI submitted. Advocates Reeti Upadhyay, and Mudit Jain, appearing for Jhunjhunwala, contended that as per the production warrant, issued by the Delhi court, the accused was required to be produced before the court on June 6. His appearance before the court prior to that date is illegal, the defence said.The CBI had registered the FIR on the basis of a complaint received from the State Bank of India against Reliance Communications Limited and Anil Ambani for allegedly causing a loss of Rs 2,929.05 crore to the bank. It is alleged that Term Loans were sanctioned to the company by a consortium of 11 banks led by the State Bank of India, who together suffered a loss of Rs 6015 crore. It was further alleged that the total exposure towards RCom amounted to Rs 19,694.33 crore involving 17 PSU Banks.Last week the CBI filed the chargesheet in the case against 16 accused, including Reliance Communications Limited. The CBI also named five senior executives of the company, along with 10 bank officials from the State Bank of India, Bank of Maharashtra, and the erstwhile Syndicate Bank in the chargesheet. The CBI has accused them of criminal conspiracy, cheating, criminal misappropriation, criminal misconduct, and corruption. Jhunjhunwala was not among the 16 named.