New Delhi: The Directorate of Enforcement (ED) has filed a supplementary prosecution complaint against Reliance Communications Limited under the Prevention of Money Laundering Act before the special court for PMLA cases here, according to an official statement issued Sunday.
The supplementary prosecution complaint was filed Saturday in continuation of the first prosecution complaint dated March 27.
Reliance Communications Limited (RCOM), Reliance Telecom Limited (RTL), Gautam Bhailal Doshi, Sateesh Seth, Amitabh Jhunjhunwala, and others have been arraigned as accused for offences under Section 3 and Section 3 read with Section 70, punishable under Section 4 of the PMLA, 2002, the statement said.
The proceeds of crime are quantified at Rs 40,185.55 crore, which is the total outstanding amount that has been defaulted by the borrower entities to consortium banks, financial institutions and bondholders. Distinct roles of the accused in the raising, deployment, concealment and projection of the funds, including false certification of the end-use of $1 billion in Foreign Currency Convertible Bonds (FCCB) proceeds, have been brought out.
Confiscation of properties worth Rs 8,078.06 crore, attached and confirmed by the Adjudicating Authority, has been prayed for. The properties include leasehold and immovable assets in New Delhi, Navi Mumbai, Bhubaneswar, Chennai, and Pune.
In this ECIR, Doshi was arrested June 12 this year, and Seth was arrested July 9. Both of them are currently in judicial custody.
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The special court for PMLA cases took cognisance of the main prosecution complaint in this case June 15.
The ED initiated an investigation on the basis of multiple FIRs registered by the CBI, Banking Securities and Fraud Branch, New Delhi, on complaints from banks and financial institutions. The scheduled offences concern the fraudulent availing and diversion of fund-based and non-fund-based credit facilities by RCOM, RTL, and Reliance Infratel Limited. The investigation covers multiple interconnected transactions.
The investigation revealed that fresh credit facilities were repeatedly used fraudulently to repay, rotate and evergreen earlier domestic and foreign liabilities instead of the sanctioned end-use for the funds.
The funds were layered through group companies, purpose-built conduit entities, multiple bank accounts and liquid mutual funds; used to service earlier External Commercial Borrowings and Foreign Currency Convertible Bonds (FCCB); and projected as legitimate business expenditure or receipts.
Investigation further revealed that the fraudulent scheme had commenced much earlier, at least by 2007, and continued thereafter as one connected and continuing course of criminal activity. Loan proceeds were diverted to group companies such as Reliance Infrastructure Ltd. and Reliance Capital Ltd. The loans were also siphoned off to purchase personal assets for the promoters outside India and serviced to artificially inflate profits for RCOM.
Further investigation in the case is still underway, the statement added.
