Reliance Communications has disclosed that Central Bank of India declared the loan accounts of its subsidiary Reliance Telecom Limited (RTL) as fraud, involving ₹18.40 crores. The disclosure was made following receipt of a letter from the bank dated December 17, 2025.

Fraud Declaration Details

The Central Bank of India's Empowered Committee made the fraud declaration based on a forensic audit report submitted by BDO India LLP on October 15, 2020. The bank had extended various credit facilities totaling ₹400.00 crores to the Reliance group entities.

Key Fraud Findings

The forensic audit identified several irregularities that led to the fraud classification:

Fund Diversion

RTL utilized a ₹220.00 crore term loan to repay Inter-Corporate Deposits (ICDs) taken from Reliance Communications Limited, which was not permitted under the sanction terms. The loan was meant for capital expenditure, operational expenditure, and repayment of existing liabilities excluding related party loans.

Complex Transaction Structure

The audit revealed unusual journal entries and transfers of high-value receivables and payables to parties with weak financial backgrounds. During the forensic audit period (April 1, 2013 to March 31, 2017), RTL paid ₹3,742.47 crores to RCOM while receiving only ₹537.83 crores.

Round-Tripping Transactions

Collections worth ₹1,110.50 crores were received by RTL from RCOM through Reliance Webstore Limited via a series of circular transactions using HDFC's intraday limit facility of ₹100.00 crores.

Timeline and Regulatory Actions

Corporate Insolvency Protection

Both Reliance Communications Limited and RTL are currently undergoing Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016. Resolution plans for both companies have been approved by their respective committees of creditors and are awaiting approval from the National Company Law Tribunal (NCLT).

The company highlighted that Section 32A of the Code provides protection against liability for offences committed prior to CIRP commencement, once resolution plans are approved by NCLT. Additionally, Section 14(1)(a) of the Code protects both entities from institution or continuation of suits and proceedings during the CIRP period.

Current Status

The credit facilities referenced in the fraud declaration pertain to the period before RTL's CIRP initiation. These liabilities are required to be resolved as part of RTL's resolution plan or through liquidation proceedings. The resolution professional has filed avoidance applications with NCLT, which are currently sub-judice, and their treatment will be determined according to NCLT decisions and applicable resolution plan provisions.

The Central Bank of India cited fund diversion and non-compliance with sanction terms as reasons for declaring the loan accounts as fraud. This declaration affects loan accounts worth ₹18.40 crores, emphasizing the severity of the financial irregularities identified in the forensic audit.

Reliance Communications Limited (RCom) and its wholly-owned subsidiary, Reliance Communication Infrastructure Limited (RCIL), are facing a comprehensive investigation by the Serious Fraud Investigation Office (SFIO), as ordered by the Ministry of Corporate Affairs (MCA). This development marks a significant turn of events for the telecommunications company, which is already undergoing corporate insolvency resolution process.

Investigation Details

The SFIO investigation, ordered under Section 212(1)(c) of the Companies Act, 2013, covers an extensive period from the financial year 2008-09 to 2023-24. The companies have been directed to provide a wide range of information and documents by November 28, 2025, including:

• Detailed financial statements
• Bank account information
• Loan and investment details
• Internal audit reports
• Corporate governance records

Company's Response

In response to the investigation, RCom has stated that it will extend full cooperation to the authorities and comply with the requirements set out in the notice. The company's management has emphasized that since only information and details are being sought, they do not expect any impact on business operations, shareholders, employees, or other stakeholders.

Regulatory Disclosure

RCom, in compliance with regulatory requirements, has made the necessary disclosures to the stock exchanges. The company has filed the information under Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Current Status of RCom

It's important to note that Reliance Communications Limited is currently under corporate insolvency resolution process pursuant to the provisions of the Insolvency and Bankruptcy Code, 2016. Since June 28, 2019, the company's affairs, business, and assets are being managed by the Resolution Professional, Mr. Anish Niranjan Nanavaty, appointed by the National Company Law Tribunal, Mumbai Bench.

Market Implications

While the full implications of this investigation are yet to be seen, it adds another layer of complexity to RCom's ongoing financial challenges. Stakeholders will be closely watching how this investigation unfolds and its potential impact on the resolution process.

The SFIO's extensive probe into RCom and RCIL underscores the regulatory scrutiny faced by major corporations in India's telecommunications sector. As the investigation progresses, it may provide insights into the financial practices of the company over the past decade and a half.