ED cracks down on Anil Ambani-linked firms in Yes Bank loan diversion case

New Delhi: The Enforcement Directorate (ED) has launched a major crackdown on entities associated with industrialist Anil Ambani in connection with an alleged Rs 3,000 crore loan diversion from Yes Bank between 2017 and 2019, according to a report.

The central agency has initiated proceedings under the Prevention of Money Laundering Act (PMLA), following a preliminary investigation that suggests a systematic scheme to siphon off public money. Officials said that the funds were illegally diverted by misleading banks, shareholders, investors, and financial institutions.

As per the report, on Thursday, the agency conducted coordinated search operations at over 35 locations, involving around 50 companies and more than 25 individuals. The searches are part of the ongoing efforts to trace financial irregularities and alleged collusion between Yes Bank executives and companies linked to the Reliance ADA Group.

Investigations have indicated that before loans were sanctioned, promoters of Yes Bank allegedly received funds in their own group entities, raising concerns around possible bribery and corruption.

The probe follows first information reports (FIRs) filed by the Central Bureau of Investigation (CBI) and inputs from regulatory authorities, including the National Housing Bank, Securities and Exchange Board of India (SEBI), National Financial Reporting Authority (NFRA), and Bank of Baroda.

A key focus of the investigation is the set of firms under the Reliance ADA Group, referred to as RAAGA companies. The ED has found multiple irregularities in the loan processes involving these entities, including missing credit appraisals, back-dated approvals, and disbursals without proper documentation or due diligence. Many of the borrowing companies were reportedly financially weak, had overlapping directors and addresses, and are suspected to be shell entities.

In several cases, loans were issued either on the same day as the application or prior to formal sanctioning, pointing to procedural lapses. Officials also flagged the use of "evergreening" – where new loans are granted to repay existing ones, potentially obscuring loan defaults, as per the report.

Reliance Home Finance Limited (RHFL) is under particular scrutiny. SEBI had previously raised concerns after corporate loan disbursals at RHFL more than doubled from Rs 3,742 crore in FY18 to Rs 8,670 crore in FY19. The ED is now examining possible violations and irregular approvals during this period.