Reliance Communications Loans Declared Fraudulent by Canara Bank

Canara Bank has given another blow to Anil Ambani's Reliance Communications. Canara Bank has declared Reliance Communications (RCom), Reliance Infratel and Reliance Telecom Limited as fraud accounts. Canara Bank has issued a notice to Reliance Communications and classified its loan account as a fraud account.

Reliance Communications loan accounts declared fraud

According to a notice sent to bankrupt telecom company RCom on Friday, Canara Bank has declared the loan accounts of Anil Ambani's Reliance Communications and its subsidiaries as fraud. This is the fourth lender to do so. Earlier in December 2020, State Bank of India, Union Bank of India and Indian Overseas Bank had declared the company's accounts as fraud or fraud.

What is the whole case of Reliance Communications?

On 28 October, Canara Bank had issued a notice to Reliance Communications, and on 5 November itself, RCom received a letter from Canara Bank. On Friday, 16 November, the company informed the stock exchanges that it has received a letter from Canara Bank classifying its accounts as fraud.

Evidence of fraud found in audit

In this letter, the letter has declared the loan accounts as fraudulent accounts based on the evidence of fraud found after the audit of the three companies. It has been stated that RCom has not only defaulted in repayment, but it has also violated the terms of approval.

According to the audit, RCom and its subsidiaries, Reliance Telecom and Reliance Infratel, collectively borrowed Rs 31,580 crore from different banks.

In March 2017, the company declared the loan a non-performing asset and accompanied it with a letter of guarantee, which is in complete violation of the bank's loan repayment terms and conditions. The bank has also accused RCom and Co of waiving money to fictitious debtors and misusing sales challan funding.

In an exchange filing, the company said these credit facilities predate the ongoing insolvency process and are required to be resolved as part of the insolvency process or liquidation, as the case may be.