The Central Bureau of Investigation (CBI) on Monday arrested Amitabh Jhunjhunwala, former Group Managing Director of Reliance Communications Group, in connection with a bank loan fraud case involving the Reliance ADA Group. Earlier in the day, a special court permitted the investigating agency to formally arrest Jhunjhunwala, who was brought to Mumbai by Tihar jail officials on a transit remand.
Details of the Arrest
Jhunjhunwala was in judicial custody in a case being investigated by the Enforcement Directorate (ED), Delhi, and was lodged in Tihar jail. He was transferred from the judicial custody of a special judge at Rouse Avenue Court in New Delhi. He will be produced before the special CBI court for his remand hearing on Tuesday.
Allegations and Case Background
The case pertains to the alleged misuse of a Rs 1,200-crore term loan sanctioned by the State Bank of India (SBI), a Rs 500 crore Letter of Credit facility sanctioned by Bank of Maharashtra, and a Rs 350 crore Letter of Credit facility sanctioned by the erstwhile Syndicate Bank. The CBI alleges that Jhunjhunwala was responsible for corporate finance, banking, and utilization of funds, and was the main person who dealt with senior bank officials for loans and advances.
According to the CBI, due to misutilization of loan funds, the banks suffered wrongful losses. It was further alleged that Jhunjhunwala was instrumental in obtaining loans from various banks, and as the companies failed to repay the amounts, the accounts became Non Performing Assets (NPAs). The CBI submitted that he was taking instructions from the promoters and directors of the Reliance Communications Group companies.
Defence Arguments
Advocates Reeti Upadhyay and Mudit Jain, appearing for Jhunjhunwala, contended that as per the production warrant issued by the Delhi court, the accused was required to be produced before the court on June 6. They argued that his appearance before the court prior to that date is illegal.
Previous FIR and Chargesheet
The CBI had registered the FIR based on a complaint from SBI against Reliance Communications Limited and Anil Ambani for allegedly causing a loss of Rs 2,929.05 crore to the bank. It is alleged that term loans were sanctioned to the company by a consortium of 11 banks led by SBI, which together suffered a loss of Rs 6,015 crore. The total exposure towards RCom amounted to Rs 19,694.33 crore involving 17 public sector banks.
Last week, the CBI filed a chargesheet in the case against 16 accused, including Reliance Communications Limited. The CBI also named five senior executives of the company, along with 10 bank officials from SBI, Bank of Maharashtra, and the erstwhile Syndicate Bank. The charges include criminal conspiracy, cheating, criminal misappropriation, criminal misconduct, and corruption. Jhunjhunwala was not among the 16 named in the chargesheet.
