CBI Gets Custody of Former Reliance ADAG MD Amitabh Jhunjhunwala in Rs 4,097 Crore Fraud

A special court on Wednesday remanded Amitabh Jhunjhunwala, the former group managing director of Reliance Communications, to Central Bureau of Investigation (CBI) custody until Friday in connection with an alleged Rs 4,097 crore bank loan fraud. Jhunjhunwala, who was already in judicial custody at the Arthur Road Jail in Mumbai for a separate but related matter, is accused of involvement in a multi-crore fraud case involving Reliance Commercial Finance Limited.

The CBI, represented by special public prosecutor Jitendra Kumar Sharma, approached the special court to secure Jhunjhunwala's custody. The probe agency informed the court that the ongoing investigation into the matter is being closely monitored by the Supreme Court of India.

According to the complaints, the fraud caused an approximate loss of Rs 4,097 crore to 13 public sector banks. The company had originally availed credit facilities exceeding Rs 9,280 crore from a consortium of 31 banks, financial institutions, and corporate bodies. These accounts were eventually declared non-performing assets on March 25, 2020.

In its submission to the court, the CBI stated that Jhunjhunwala's role and complicity in the fraud emerged during the course of the investigation. As the managing director of the ADA Group who looked after corporate finance, he allegedly held an authoritative position within the group.

The CBI alleged that Jhunjhunwala used his position to direct senior executives—including chief executive officers, chief financial officers, chief risk officers, and directors—to sanction general-purpose corporate loans to shell or paper companies of the Reliance ADA Group or interlinked entities. These funds were then routed to group companies of Reliance ADA. The loans remained unpaid, resulting in wrongful losses to the lending banks.

Additionally, the CBI submitted that Jhunjhunwala gave instructions via electronic messages to route funds from Reliance Commercial Finance Limited and Reliance Capital Limited to other group companies, which was in complete and repeated violation of the sanction terms and conditions.