Reliance Communications has disclosed to stock exchanges that Central Bureau of Investigation officials conducted a search and seizure operation at the office premises of its wholly owned subsidiary Reliance Telecom Limited on March 26, 2026. The operation took place at B Block, Dhirubhai Ambani Knowledge City, Navi Mumbai, with the company filing the mandatory disclosure under Regulation 30 of SEBI Listing Regulations.

Search Operation Details

The CBI officials conducted the search and seizure operation under provisions of Section 185 and Section 103(6) of the Bhartiya Nagarik Suraksha Sanhita, 2023. During the operation, officials took possession of extensive documentation related to the subsidiary's financial and banking activities.

Documents Seized

The investigation agency seized a comprehensive range of financial documents spanning approximately seven years. The seized materials included original and copies of correspondence between Reliance Telecom Limited and various financial institutions regarding credit facilities, loan sanctions, and banking operations.

Key documents seized include:

• Letters exchanged with banks and financial institutions regarding extension, renewal, and review of credit facilities
• Sanction communications for term loans and working capital limits
• Due diligence reports prepared by the Practicing Company Secretary
• End use certificates and banking correspondence from 2012 to 2019
• Original signed financial statements from FY 2012-13 to FY 2018-19
• Portable SSD containing books of accounts data and related party transaction summaries

Business Impact Assessment

Reliance Communications stated that the search and seizure operation is not expected to have any impact on the financial or operational activities of either the parent company or its subsidiary. Both entities continue to operate their business in the normal course despite the investigation.

Corporate Insolvency Status

Both Reliance Communications and Reliance Telecom Limited are currently undergoing corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016. The companies benefit from protections available under IBC provisions, with their affairs being managed by Resolution Professional Anish Niranjan Nanavaty since June 28, 2019, following orders from the National Company Law Tribunal, Mumbai Bench.

The disclosure was made in compliance with SEBI regulations and circular requirements, ensuring transparency regarding regulatory actions affecting the listed entity and its subsidiaries.

Reliance Communications has disclosed that its subsidiary Reliance Telecom Limited (RTL) has been classified as a fraud account by State Bank of India (SBI) following extensive forensic audit findings. The bank's Fraud Identification Committee reached this decision on February 21, 2026, after examining evidence of systematic fund misutilization and breach of loan covenants.

Fraud Classification Details

SBI's decision stems from a comprehensive forensic audit conducted by BDO India LLP, which revealed significant irregularities in RTL's loan account operations. The bank had issued show cause notices in December 2023, providing RTL an opportunity to respond before making the final determination.

Financial Irregularities Identified

The forensic audit uncovered substantial misutilization of borrowed funds by RTL. The company had availed aggregate loans of ₹375 crore from various banks during the review period, with SBI providing ₹125 crore as part of a composite sanction.

The loan terms specifically excluded repayment of related party or shareholder loans, but the forensic audit revealed that the majority of RTL's borrowed funds were diverted to connected entities, constituting a clear breach of trust and misappropriation.

Key Fraud Triggers

SBI's Fraud Identification Committee identified several critical violations that led to the fraud classification:

• Fund Misutilization: RTL used loan proceeds for purposes other than those approved, particularly payments to connected parties
• Breach of Loan Covenants: Violation of specific restrictions against related party payments mentioned in sanction terms
• Circular Transactions: Complex routing of funds through multiple group entities without commercial substance
• Manipulation of Accounts: Structured transactions designed to obscure actual fund utilization patterns

Corporate Insolvency Protection Claims

RTL's Resolution Professional had argued that the company enjoys protection under the Insolvency and Bankruptcy Code, 2016, citing moratorium provisions and immunity under Section 32A. However, SBI's Fraud Identification Committee determined that:

• Moratorium provisions do not apply to fraud identification proceedings
• Section 32A protection is not available until resolution plan approval by NCLT
• Fraud classification proceedings serve different purposes than insolvency resolution

Regulatory Reporting and Next Steps

Following the fraud classification, SBI will report RTL's name to the Reserve Bank of India as per regulatory guidelines. The bank has completed its due process by:

• Issuing show cause notices in December 2023
• Providing complete forensic audit reports in October 2025
• Allowing adequate response time before final determination
• Following principles of natural justice as mandated by Supreme Court judgment

Impact on Listed Entity

Reliance Communications noted that both the parent company and RTL are undergoing corporate insolvency resolution process, with approved resolution plans awaiting NCLT approval. The company emphasized that credit facilities referenced in SBI's letter pertain to the pre-CIRP period and must be resolved through the resolution plan or liquidation process as per the Insolvency and Bankruptcy Code.