Reliance Communications Limited has informed the Exchange about Fraud/Default/Arrest
RCOM · price
▲ positive · ▼ negative · ● neutral filings · teal = economic event · numbered = multiple that day (click to pick). Times IST.
Awaiting price reaction for this filing.
Canara Bank has formally classified credit facilities of Rs. 100 crore extended to Reliance Telecom Limited (RTL), a wholly-owned subsidiary of RCOM, as 'fraud' and has ordered the account to be reported to RBI for inclusion in the Central Fraud Registry. The classification follows a forensic audit by BDO India LLP (covering FY2014 to FY2017) which flagged large-scale fund diversion across RCOM, RITL, and RTL — including Rs. 31,580 crore in cumulative bank loans, of which Rs. 13,667 crore (44%) was used to repay other bank loans and Rs. 12,692 crore (41%) went to connected parties. RCOM's Resolution Professional objected, citing the IBC moratorium and Section 32A immunity, but the bank rejected these contentions, relying on the 2025 NCLT Rolta India ruling that fraud classification is a regulatory action not barred by Section 14. Both RCOM and RTL are already under CIRP since June 2019, with their resolution plans approved by the Committee of Creditors and pending NCLT approval. The company is seeking legal advice on next steps.
Negative for shareholders — a formal fraud classification by a major lender and impending RBI Central Fraud Registry listing worsen RCOM's already distressed status, though since both RCOM and RTL are under CIRP and their resolution plans are awaiting NCLT approval, Section 32A immunity could shield the company from prior offences once a plan is approved. Near-term stock price reaction may be muted given the stock is suspended/already distressed, but the development adds uncertainty to the ongoing resolution process.