CBI arrests former RCFL and RHFL CEOs in Rs 7,623 crore bank fraud case

The CBI has arrested former RCFL CEO Devang Mody and former RHFL CEO Ravindra Sudhalkar in separate cases linked to an alleged Rs 7,623 crore fraud involving multiple public sector banks. The agency alleges diversion of borrowed funds to Reliance ADA Group companies

New Delhi: The CBI arrested former CEOs of Reliance Commercial Finance Limited (RCFL) and Reliance Home Finance Limited (RHFL) on Monday in connection with separate cases pertaining to an alleged fraud of Rs 7,623 crore involving multiple public sector banks, officials said.

The CBI has arrested former RCFL director and chief executive officer Devang Mody and former executive director and CEO of RHFL Ravindra Sudhalkar, they said.

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“In the RCFL case, the accused caused a loss of Rs 4,097 crore to 13 Public Sector Banks (PSBs), whereas in the RHFL case, the loss amount is Rs 3,526 crore to 10 PSBs,” a CBI spokesperson said in a statement.

The CBI probe has shown that Mody, who was the CEO of RCFL from April 2017 to December 2018, “was a key decision-maker” responsible for managing the operations of the company, the agency said.

“He approved loans to intermediary and conduit companies despite being aware that such lending was contrary to RBI guidelines and the sanction conditions governing borrowings from Public Sector Banks,” the statement said.

Sudhalkar served as the ED and CEO of RHFL from October 1, 2016, to March 31, 2022, it said.

“He was a key decision-maker responsible for managing the operations of Reliance Home Finance Limited (RHFL). He approved loans to intermediary and conduit companies despite such lending being contrary to the company’s lending policies, NHB/RBI guidelines and the conditions governing borrowings from Public Sector Banks,” the statement said.

The agency alleged that the accused diverted funds borrowed by RCFL and RHFL to Reliance ADA Group companies, including Reliance Capital Limited, Reliance Infrastructure Limited and Reliance Power Limited, thereby causing a combined wrongful loss of Rs 7,623 crore to the lending banks and a corresponding wrongful gain to themselves and related entities.

The CBI has registered seven FIRs against Reliance Communications Limited (RCom), RHFL, RCFL and Reliance Telecom Limited (RTL), based on complaints received from various PSBs and the Life Insurance Corporation of India (LIC).

The agency has arrested five persons in Reliance ADA Group-related cases. It filed its first chargesheet in the RCom case on May 29 against 16 accused — the company, five senior executives of RCom and 10 bank officials.