Reliance Communications has received an order from the Adjudicating Authority under the Prevention of Money Laundering Act (PMLA) confirming the attachment of its assets worth ₹581.65 crore. The order, dated August 25, 2026, formalises a provisional attachment initiated in March 2026 by the Enforcement Directorate (ED).

Order details

The Adjudicating Authority confirmed the attachment of movable and immovable properties under Section 5(1) of the PMLA in Original Complaint No. 263/2026. The authority ruled that the attached properties represent the equivalent value of proceeds of crime that had been dissipated.

Basis for attachment

The ED alleged that Reliance Commercial Finance Limited (RCFL) diverted funds amounting to ₹1,182 crore to Reliance Communications and Reliance Telecom Limited through five non-banking financial companies (NBFCs). The investigation established that ₹1,162.53 crore of these funds were utilised by Reliance Communications towards repayment of principal amounts for External Commercial Borrowings (ECBs) availed from Chinese banks, including China Development Bank, Export-Import Bank of China, and Industrial and Commercial Bank of China.

Because the direct proceeds were used to settle foreign liabilities and thus became untraceable within India, the ED attached other properties held by the company as equivalent value. The attached assets include industrial plots and land parcels located across Goa, Kerala, Karnataka, Punjab, Tamil Nadu, Uttar Pradesh, Haryana, Jharkhand, Maharashtra, West Bengal, Andhra Pradesh, Gujarat, and Rajasthan.

Legal context and insolvency proceedings

Reliance Communications is currently undergoing the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC), 2016. The company had argued that the moratorium under Section 14 of the IBC prohibits such attachments. However, the Adjudicating Authority noted that PMLA proceedings are distinct from debt recovery actions and are not barred by the IBC moratorium until a resolution plan is approved by the National Company Law Tribunal (NCLT).

The order states that the attachment will remain in force during the investigation for a period not exceeding 365 days or until the conclusion of proceedings before the Special Court under the PMLA. Reliance Communications may file an appeal before the Appellate Tribunal for PMLA within 45 days of receiving the order.

Reliance Communications reported a consolidated loss attributable to equity holders of ₹809 crore for the quarter ended June 30, 2026, a significant improvement from the ₹2,560 crore loss recorded in the corresponding period of the previous fiscal year. On a standalone basis, the company’s total comprehensive income stood at a loss of ₹663 crore, compared to ₹2,217 crore in Q1FY25. The financial results were approved by the Resolution Professional (RP), Mr. Anish Niranjan Nanavaty, in a meeting held on August 13, 2026, underscoring the continued management of the company under the Insolvency and Bankruptcy Code (IBC).

Financial Performance Overview

The consolidated revenue from operations remained stable at ₹74 crore for the quarter, marginally down from ₹81 crore in the previous quarter but lower than the ₹83 crore reported in Q1FY25. Total expenses for the consolidated entity amounted to ₹91 crore, driven primarily by access charges, license fees, and network expenses of ₹27 crore.

On a standalone basis, revenue from operations was ₹56 crore, consistent with the prior quarter but down from ₹61 crore in Q1FY25. Standalone total expenses were ₹75 crore, with sales and general administration expenses contributing ₹17 crore. The company recognized a gain on settlement of liabilities amounting to ₹1,566 crore as an exceptional item in standalone results, while consolidated results included a profit on de-subsidiarization of ₹468 crore.

What the Numbers Show

The reported financial position is heavily influenced by accounting treatments mandated by the ongoing CIRP. The auditors highlighted that the company has not provided for interest on borrowings amounting to ₹1,134 crore (standalone) and ₹1,186 crore (consolidated) for the quarter. Additionally, foreign exchange gains of ₹35 crore (standalone) and ₹39 crore (consolidated) were not recognized. Had these items been provided, the standalone loss would have been higher by ₹1,099 crore, and the consolidated loss would have increased by ₹1,147 crore. This divergence between reported and potential losses illustrates the material impact of regulatory moratoriums on financial statement presentation.

Balance Sheet and Regulatory Status

As of June 30, 2026, the consolidated net worth stood at a negative ₹1,04,759 crore, while the standalone net worth was negative ₹80,952 crore. The current ratio for the consolidated entity was 0.05, indicating significant liquidity constraints. The auditors issued a qualified opinion, citing material uncertainties regarding the company’s ability to continue as a going concern due to continuous losses, current liabilities exceeding current assets, and defaults in statutory dues.

The company continues to face multiple legal and regulatory challenges. The Enforcement Directorate (ED) and Central Bureau of Investigation (CBI) have conducted searches and attached certain assets under the Prevention of Money Laundering Act (PMLA). Furthermore, the Department of Telecommunications (DoT) disputes regarding license fee and spectrum usage charges remain pending, with an estimated liability provision of ₹71,086 crore up to the previous financial year. The resolution plan approval process remains sub-judice before the National Company Law Tribunal (NCLT), with the next hearing scheduled for August 27, 2026.