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Reliance Infrastructure Ltd rose 5% on Monday despite the Central Bureau of Investigation (CBI) having filed a First Information Report (FIR) against the company and its former chairman, Anil Ambani, and others in relation to the alleged irregularities in investments of the Employees' Provident Fund Organisation (EPFO).
The FIR is based on a complaint by the Union Ministry of Labour and Employment on July 21 alleging criminal conspiracy, cheating, criminal breach of trust and criminal misconduct.
EPFO had invested Rs. 2,500 crore in the secured Non-Convertible Debentures (NCDs) of Reliance Capital in the year 2013 and 2014, which matured in 2023 and 2024, according to the complaint.
The investments eventually led to a loss of Rs. 1,816.22 crore to EPFO, authorities claim.According to the complaint, an alleged financial loss of Rs. 1,007 crore and interest liability of Rs. 808.67 crore added up to the loss of Rs. 1,816.22 crore.
"The present complaint is being lodged on behalf of EPFO through its authorised officer pursuant to the approval of the competent authority in relation to the substantial loss suffered by the EPFO arising out of its investment in the secured Non-Convertible Debentures issued by Reliance Capital Limited and the subsequently discovered material indicating fraudulent conduct connected with such investment," according to the Labour Ministry's complaint.
The complaint came in the wake of the Enforcement Directorate (ED) submitting documentary evidence and a transaction audit by BDO India LLP, which allegedly found prima facie fraudulent transactions done by Reliance Capital between December 2019 and December 2021, according to the Labour Ministry.
The complaint also noted investigators are looking into allegations of fund diversion, irregular lending, impairment of security and other financial transactions that may have caused the company's financial troubles and failure to pay debenture holders.
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Reacting to the FIR, Anil Ambani’s spokesperson said that the case was related to Reliance Capital Ltd and Ambani previously held the position of Non-Executive Director and Chairman of the company until November 2021, when the Reserve Bank of India (RBI) replaced the board and appointed an administrator.
"Anil Ambani denies any wrongdoing whatsoever, and reserves all rights available to him in law," the spokesperson said.
