New Delhi: The Central Bureau of Investigation (CBI) has filed a First Information Report against Reliance Capital Limited (RCL), its former chairman Anil Ambani, and unknown public servants over an alleged Rs 1,816.22-crore loss to the Employees’ Provident Fund Organisation (EPFO).
In what could be described as a clear case of conflict of interest, Reliance Capital Asset Management Limited had invested Rs 608 crore of the public funds available with the EPFO in Non-Convertible Debentures (NCDs) issued by Reliance Capital, the statutory body alleged in its complaint to the CBI last week.
The transactions—in May 2013 and April 2014—took place when both Reliance Capital Asset Management Limited and Reliance Capital were grouped together under Reliance Group headed by Anil Ambani. He served as the chairman of Reliance Capital between 2005 and 2021, when the firm was admitted for insolvency proceedings and the board was superseded by the Reserve Bank of India (RBI), which appointed an administrator.
Established as an autonomous body under the Ministry of Labour and Employment, the EPFO provides provident fund, pension, and insurance schemes for employees. Often referred to as a retirement avenue, the EPFO has been the bedrock of savings for the working class, providing a lump-sum corpus at retirement and pensions for subscribers.
Overall, funds amounting to Rs 2,500 crore were put into Reliance Capital bonds through the subscription to the NCDs issued in May 2013 and April 2024 by fund managers such as State Bank of India (SBI), Reliance Capital Asset Management, HSBC Asset Management (India) Pvt. Ltd., and ICICI Securities Primary Dealership Ltd.
According to a ministry statement, these asset management companies were appointed as portfolio managers at the 195th meeting of the Central Board of Trustees in New Delhi in July 2011. All four firms were appointed for a four-year tenure.
According to the details shared with the CBI, the EPFO documented that RCL was admitted into insolvency in 2021, prompting it to approach the resolution professionals to seek claims amounting to Rs 3,308.67 crore, including an interest of Rs 808.67 crore.
According to the resolution plan approved by the National Company Law Tribunal (NCLT) in February 2024, the EPFO further stated that only Rs 1492.45 crore was recovered—resulting in a loss of nearly Rs 1007.55 crore to the EPFO, which primarily deals with public money.
“A written complaint dated 21.07.2026 has been received from Ningshen Thothar, RPFC-I (Investment Division), EPFO, (Ministry of Labour & Employment), New Delhi against Reliance Capital Limited, Mumbai, the then Chairman Anil D. Ambani, unknown public servants and other unknown persons, on the allegation of commission of offences of cheating, criminal conspiracy and criminal misconduct and causing wrongful loss to EPFO to the tune of Rs 1007.55 crore plus interest,” the CBI report stated.
A spokesperson for Anil Ambani refuted all the allegations and reiterated that the Reliance Capital board had been superseded by the RBI, and that an administrator had been appointed.
“The FIR registered by the CBI pertains to Reliance Capital Limited. Mr Ambani served as a Non-Executive Director/Chairman of the Board of Reliance Capital Limited from 2005 until November 2021, when the RBI superseded the Board of Directors of the company and appointed an Administrator,” the spokesperson said. “Mr Ambani denies any wrongdoing whatsoever, and reserves all rights available to him in law.”
ED’s inputs bring case to light
The CBI FIR also refers to inputs received from the Enforcement Directorate, which highlighted that the people in charge of Reliance Capital’s affairs between December 2019 and December 2021 were involved in several alleged fraudulent transactions that led to the failure of Reliance Capital as a commercial entity and culminated in insolvency proceedings.
The ED had formed such an opinion based on an audit of transactions conducted by an accounting firm for the relevant period, using materials gathered during the investigation into the fund diversion from Reliance Capital. As part of the investigation, the agency arrested the firm’s former Managing Director and CEO Punit Garg in January.
ThePrint had earlier reported that Garg was accused of paying around $40,436 in university fees for his US-based daughters and routing $36,560 in rental income from a Manhattan apartment owned by the company’s foreign subsidiary for their personal expenses.
The agency had initiated a money-laundering probe based on a CBI case against Ambani and Reliance Communications for allegedly causing a loss of more than Rs 2,929 crore to the State Bank of India (SBI).
“The Directorate of Enforcement also forwarded the principal findings emerging from the transaction audit report, including serious deficiencies in the sanctioning and monitoring of inter-corporate deposits, lending to entities with weak financial position, diversion of funds, non-compliance with internal lending policies, masking of credit deterioration through fresh disbursements, write-off of substantial exposures to group entities, and utilisation of borrowed funds for purposes other than those represented,” the CBI FIR documented.
The debentures issued by RCL and held by the EPFO portfolio managers were secured by RCL’s assets under the specific terms and conditions of the agreements between the parties, and RCL was barred from any alteration or alienation of such assets without the consent of the debenture investors, including the EPFO and the Life Insurance Corporation of India.
However, the ED brought to the CBI’s notice several instances in which the management of RCL carried out “unauthorised alienation and encumbrance of assets,” leading to the “erosion of the security attached to the debentures and the promises made to investors under the agreement.”
“According to the material forwarded by the ED, these transactions prima facie disclose evidence of preferential treatment extended to select creditors to the detriment of the general body of secured Debenture Holders including LIC & EPFO and a disregard of the contractual obligations under the Debenture Trust Deeds as well as the applicable regulatory framework governing secured debt,” the FIR says.
(Edited by Nardeep Singh Dahiya)
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