Facing probe over alleged bank loan frauds, Chairman of the Anil Dhirubhai Ambani Group (ADAG) Anil Ambani recently wrote to Finance Minister Nirmala Sitharaman, expressing willingness to repay the outstanding dues and seeking constitution of a committee to legally crystallise the amount and fix a repayment schedule.
According to the March 17 letter, he had made the request to the Supreme Court, too, which is hearing petitions seeking probe against the group, to constitute a three-member High Powered Committee of independent legal and financial experts or a Committee of Lenders “to consolidate and crystallise the net principal exposure to lenders after accounting for recoveries under IBC and ICA (Intercreditor Agreement), asset monetisation, promoter infusions, and other relevant issues.”
Ambani said there is a “clear legal precedent” for this in the SC allowing a “structured institutional resettlement” in the recent Sterling Biotech Ltd (SBL) case. The SC had, in the case, allowed dropping of criminal and other charges against the Sandesara brothers, promoters of SBL, who were declared fugitive, on payment of Rs 5,100 crore towards full and final repayment of outstanding dues.
Ambani said that his Reliance Group and he “are materially superiorly placed than fugitive companies and fugitive families.” He said, “I have not been declared a fugitive. To the contrary, I have given an undertaking to the Hon’ble Supreme Court that I will not leave the country without the permission of the Hon’ble Court. If a structured resolution was achievable in far more adverse circumstances — for individuals outside the jurisdiction, declared fugitives — it is pragmatically and legally possible in the present case on merits and equity.”
The letter said his Reliance group “suffered collateral damage due to the crisis in the telecom and financial services sector”.
The letter is part of a supplementary counter affidavit filed by Ambani before the SC, saying that “a structured resolution…would not only serve the interests of the lenders but would also address the larger public interest concerning over 50 lakh retail shareholders and bring to an end multiple parallel judicial and quasi-judicial proceedings currently ongoing.”
Meanwhile, hearing a petition by former Union secretary E A S Sarma seeking a court-monitored probe into the bank loan fraud cases of ADAG, the SC on Monday said that the Enforcement Directorate (ED), in an affidavit, had pointed to alleged misuse of IBC (Insolvency and Bankruptcy Code) proceedings to settle claims of thousands of crores with just a few crores.
Story continues below this ad
“…There is a reference to Project Help, which is said to have revealed how insolvency petitions were deliberately initiated through unrelated lenders. According to the report, all funding by IBC acquisitions were arranged through a group of eight NBFCs. On illustrative basis, it is pointed out that claims (amounting to) approx. Rs 2,983 crore were extinguished for a total settlement of Rs 26 crore,” a bench of Chief Justice of India Surya Kant and Justices Joymalya Bagchi and Vipul M Pancholi said in its order.
The court said that as per the affidavit, the ED had set up a Special Investigation Team (SIT) that had commenced probe into eight cases.
The bench said that it is a case “where senior functionaries of the investigating agencies must join hands and make vigorous attempts to unearth the irregularities/illegalities or the connivance of the public functionaries, especially the financial institutions, if any, in giving undue benefit…” It asked the ED and CBI to take “the ongoing investigations to a logical conclusion in a timebound manner”.
Solicitor General Tushar Mehta, appearing for the agencies, sought to assure that effort will be made to complete the investigation in four weeks.
Story continues below this ad
Senior Advocate Mukul Rohatgi, appearing for Ambani, said the group had requested banks to explore if the issue can be settled but since the matter is pending before the SC, they were reluctant to talk.
The CJI said, “We have not stopped anyone. And we know that the banks will happily enter into, because that would be another way for them to wriggle out of the consequences, if any.”
Appearing for the petitioner, Advocate Prashant Bhushan said that only some low-level officials had been arrested in the matter so far and the top executives were still roaming free.
The CJI said, “We may not say who should and should not be arrested”, adding, “the way investigating agencies have shown reluctance, that’s not acceptable…Investigation must inspire confidence —not only of the court but of all stakeholders.”
