India’s financial crime agency has provisionally frozen Rs 30.84 billion ($350.87 million) in assets linked to Ani Ambani’s Reliance Group.
The Enforcement Directorate (ED) initiated the action as part of an extensive money-laundering investigation into loans issued by YES Bank Ltd between 2017 and 2019 amounting to more than $568.86 million.
Officials allege, according to a Reuters report, that the borrowed funds were moved through a network of shell entities, disguised as investments, and ultimately misused.
The development represents one of the most significant probes into corporate financial misconduct in India in recent years.
ED blocks properties across India’s major cities
According to government sources cited by Reuters, the ED has barred any transactions involving multiple residential and commercial assets in Mumbai, Delhi, and Chennai.
Among them is Anil Ambani’s family residence in Mumbai, along with land parcels and properties connected to Reliance Group subsidiaries.
Investigators believe that Reliance Home Finance Ltd and Reliance Commercial Finance Ltd redirected funds raised from YES Bank into shell companies by routing the capital through mutual funds and other investment vehicles.
These transfers, the ED claims, were carried out in violation of existing financial regulations and without legitimate business justification.
Rs 30 billion allegedly routed through shell companies
Authorities suggest, as per Reuters, that approximately Rs 30 billion ($350 million) was channelled through shell entities as part of what they describe as a structured diversion of loan proceeds.
The ED’s findings point to borrowers with weak financial credentials, missing loan documentation, and evidence of fund misappropriation.
Investigators have also cited suspected payments made to YES Bank officials prior to loan approvals, indicating potential collusion between the lender and the borrowing entities.
Reliance Group has yet to release a public statement regarding the allegations. The agency’s forensic audit is expected to determine the full extent of fund diversion across various group structures.
Wider inquiry into Reliance Communications and related firms
The scope of the investigation extends beyond the financial subsidiaries. Reliance Communications Ltd and associated entities are also being examined for the suspected diversion of over Rs 136 billion ($1.55 billion).
The alleged mechanism involved loan evergreening, where older debts were repaid through new borrowings to conceal defaults and sustain credit lines.
Regulators have identified this practice, notes Reuters, as a key contributor to the accumulation of stressed assets within India’s financial system.
Investigators are assessing whether related-party transactions were employed to artificially maintain repayment records and preserve the appearance of solvency.
If proven, such findings could reinforce the ED’s case that the group used internal fund transfers to mask liquidity shortfalls while continuing to raise external credit.
The agency is expected to file detailed reports under the Prevention of Money Laundering Act (2002), forming the basis for judicial proceedings.
YES Bank’s exposure to high-risk lending
YES Bank, once a leading private lender in India, has been repeatedly criticised for its exposure to financially fragile borrowers prior to its state-backed rescue in 2020.
The bank’s credit portfolio during that period included large loans to several business conglomerates in the infrastructure, telecom, and housing-finance sectors.
Many of these loans subsequently turned non-performing, prompting the Reserve Bank of India to intervene and coordinate a recapitalisation.
The current case reopens scrutiny into the lending culture that prevailed in India’s private banking sector at the time.
Experts suggest that the investigation could strengthen future regulatory frameworks governing corporate credit assessment and transparency, particularly when conglomerates operate through a web of subsidiaries that obscure the end-use of funds.
Growing scrutiny on public-fund management
The ED’s focus remains on establishing how public funds, lent through regulated financial channels, may have been diverted and reintroduced into the system as ostensibly legitimate capital.
The agency is reviewing extensive documentation from lenders, intermediaries, and borrower accounts to determine the ultimate recipients of the funds.
All identified assets remain under provisional attachment, and any sale or transfer will require judicial consent.
The findings are expected to inform future policy decisions concerning corporate borrowing practices and the monitoring of high-value transactions.
This case exemplifies India’s intensified efforts to enforce accountability in its financial ecosystem.
It also signals a broader commitment by authorities to address structural vulnerabilities that allow large-scale fund diversion under the guise of legitimate enterprise.
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