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Reliance Communications is already facing bankruptcy proceedings and this new move is a big blow to it.
Canara Bank has given another blow to Anil Ambani’s Reliance Communications. Canara Bank has declared Reliance Communications, Reliance Infratel and Reliance Telecom Limited as fraud accounts. Canara Bank has issued a notice to Reliance Communications and declared its loan account as a fraud account.
Fraud exposed in loan accounts of Reliance Communications
Canara Bank has declared the loan accounts of Anil Ambani-owned Reliance Communications (RCom) and its subsidiaries as fraudulent, according to a notice sent to bankrupt telecom company RCom on Friday. This is the fourth bank 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 fraudulent.
what is the whole matter
A notice was given to Reliance Communication by Canara Bank on 28 October and a letter sent by Canara Bank was received by Reliance Communication on 5 November. On Friday, November 16, the company informed the stock exchanges that it had received a letter from Canara Bank classifying its accounts as fraudulent.
Evidence of fraud found in audit
The letter announced the declaration of the loan accounts as fraudulent accounts based on evidence of fraud found after the audit of the three companies. It said RCom has not only defaulted in repayment but also violated the terms of the sanction. According to the audit, Reliance Communications and its subsidiaries – Reliance Telecom and Reliance Infratel collectively owed Rs. Loan of Rs 31,580 crore was taken. In March 2017, the company declared the loan a non-performing asset and attached a letter of guarantee with the loan, which is in complete violation of the loan repayment terms and conditions of the bank. The bank also accused RCom and the company of waiving off money to fake borrowers and misusing sales invoice funding.