Fall from Fortune: Anil Ambani Tagged ‘Fraud’ by SBI After Once Ranking Among World’s Richest

From Billionaire to Bankruptcy: The Rise and Collapse of Anil Ambani

Anil Ambani’s journey from boardroom brilliance to financial infamy is one of India’s most dramatic corporate reversals. Once ranked the sixth richest person in the world, Ambani helmed the Reliance Group’s telecom, infrastructure, and financial services arms after the 2005 split with brother Mukesh Ambani.

His flagship venture, Reliance Communications (RCom), was once a telecom powerhouse. But by 2019, it had entered corporate insolvency resolution, weighed down by debt and dwindling market share. The collapse of RCom triggered a domino effect across his empire, Reliance Power, Reliance Capital, and Reliance Infrastructure all faced regulatory scrutiny, defaults, and insolvency proceedings.

In 2020, Ambani declared personal bankruptcy in a UK court, claiming he lacked funds to pay legal fees. This followed a lawsuit by Chinese banks over $925 million in defaulted loans, with a London court ordering him to pay $716 million, including interest and costs.

The Securities and Exchange Board of India (SEBI) later banned him from the securities market for five years, citing fund diversion from Reliance Home Finance. The ban remains in effect until August 2029.

SBI’s ‘Fraud’ Tag: ₹31,580 Crore Under the Scanner

The latest blow came on June 23, 2025, when the State Bank of India (SBI) classified RCom’s loan account as ‘fraud’, citing serious deviations in fund utilization. SBI’s Fraud Identification Committee found that of the ₹31,580 crore borrowed:

• ₹13,667 crore (44%) was used to repay other bank loans
• ₹12,692 crore (41%) was transferred to connected parties
• ₹6,265 crore and ₹5,501 crore were routed to entities not aligned with sanctioned purposes

The bank flagged inter-corporate deposits, book manipulation, and routing of funds through subsidiaries like Reliance Infratel, Reliance Telecom, and Reliance Communications Infrastructure Ltd (RCIL). These transactions allegedly obscured the origin of funds and sidestepped regulatory approvals.

SBI is now reporting Ambani’s name to the Reserve Bank of India (RBI), a move that could trigger criminal investigations and bar him from accessing finance from regulated institutions for five years.

Ambani’s legal team responded, calling the order “ex-parte” and claiming he was a non-executive director during the period in question. They argued he wasn’t responsible for day-to-day operations and demanded SBI withdraw the classification.

A Complex Web of Defaults, Diversions, and Denials

The SBI action is not isolated. In September 2024, Canara Bank had already marked RCom as a fraudulent borrower, citing similar concerns. Audits by Price Waterhouse Coopers and Grant Thornton between 2018 and 2020 flagged over ₹25,000 crore in suspected fraudulent loans and fund diversions across Reliance Group entities.

In one case, a ₹250 crore loan from Dena Bank meant for statutory dues was allegedly diverted to RCIL and later used to repay an external commercial borrowing from BNP-Paribas. Another ₹248 crore loan from India Infrastructure Finance Company (IIFCL) was used to settle previous loans via group entities without clear justification.

The National Company Law Tribunal (NCLT) is currently reviewing RCom’s resolution plan. Under the Insolvency and Bankruptcy Code (IBC), the company may gain immunity from past offenses once the plan is approved. However, SBI’s move could complicate proceedings and trigger fresh legal challenges.

Ambani’s empire, once a symbol of post-liberalization ambition, now stands as a cautionary tale of over-leverage, opaque governance, and regulatory backlash.

Conclusion:
Anil Ambani’s fall from grace is no longer just a business story, it’s a saga of financial mismanagement, regulatory reckoning, and reputational ruin. As SBI’s fraud tag reverberates through India’s banking and corporate corridors, the former billionaire faces a future defined not by boardroom deals, but by courtroom defenses. Whether redemption is possible remains uncertain but the consequences of unchecked ambition are now painfully clear.

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