New Delhi: The Central Bureau of Investigation (CBI) has arrested senior Reliance Communications (RCom) Group executive Amitabh Jhunjhunwala in connection with an ongoing bank fraud investigation linked to alleged misuse of loan funds.

Jhunjhunwala, who served as Group Managing Director of Reliance Communications, was responsible for key functions including corporate finance, banking operations and utilization of company funds, according to the CBI.

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Allegations of Loan Fund Misuse

The agency alleged that Jhunjhunwala played a major role in securing loans from banks and coordinating with senior banking officials regarding advances provided to the company.

Investigators claim that loan funds received by the RCom Group were allegedly misused under directions from senior management, causing significant financial losses to banks after the accounts turned into non-performing assets (NPAs).

The CBI further alleged that Jhunjhunwala acted under instructions from promoters and directors of Reliance Communications Group companies.

SBI Complaint and Multi-Bank Exposure

The case was registered on the basis of a complaint filed by the State Bank of India (SBI) against Reliance Communications Limited and industrialist Anil D. Ambani.

According to the complaint, SBI alleged a loss of Rs 2,929.05 crore. The broader consortium of 11 banks led by SBI reportedly suffered losses amounting to Rs 6,015 crore. The agency also stated that the total exposure of 17 public sector banks to RCom stood at Rs 19,694.33 crore.

Apart from the present case, the CBI has registered six additional FIRs to RCom, Reliance Home Finance Limited (RHFL), Reliance Commercial Finance Limited (RCFL) and Reliance Telecom Limited (RTL). These investigations are currently underway and are being monitored by the Supreme Court.

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Arrest and Court Proceedings

Jhunjhunwala was already lodged in Tihar Jail in Delhi in connection with a separate Enforcement Directorate (ED) case. The CBI obtained production warrants from a Mumbai court to take him into custody in the present matter.

Following medical examination at AIIMS Delhi, he was declared fit to travel and was subsequently brought to Mumbai, where he was produced before a special court on June 1.

The court recorded his formal arrest and remanded him to judicial custody in the RCom case. He has been sent to Arthur Road Jail, while the CBI’s plea for police custody is scheduled to be heard on Tuesday.

Earlier on May 29, the CBI filed its first chargesheet in the case against 16 accused, including the company, five senior RCom executives and ten bank officials.