Mumbai: Reliance Communications Ltd (RCom) on Monday said its subsidiary Reliance Telecom Ltd (RTL) has received a communication from Central Bank of India stating that the lender’s empowered committee has classified RTL’s loan accounts as fraud, involving an amount of about ₹18.4 crore.
In a regulatory filing, RCom said the letter, dated December 17 and received on December 22, informed RTL that the fraud classification has been reported to the Reserve Bank of India. The bank’s action follows a forensic audit that flagged irregularities in the conduct of the account and the status of secured assets.
RCom said the loans in question relate to a period prior to the commencement of corporate insolvency resolution proceedings (CIRP) for both RCom and RTL. Resolution plans for the two entities have already been approved by their respective committees of creditors and are awaiting approval from the National Company Law Tribunal (NCLT), the company said.
The company added that during CIRP, proceedings against RCom and RTL are stayed under Section 14 of the Insolvency and Bankruptcy Code. It also cited protections under Section 32A of the Code, which provide immunity from prosecution for offences committed prior to CIRP once a resolution plan involving a change in management is approved by the NCLT.
RCom said legal advice is being sought on the way forward, and that the impact of the lender’s action will be addressed in accordance with the insolvency process.