New Delhi – The Central Bureau of Investigation (CBI) has leveled serious allegations against industrialist Anil Ambani’s Reliance ADA Group, Yes Bank co-founder Rana Kapoor, and Reliance Nippon Asset Management (RNAM) for orchestrating a series of intricate financial transactions. According to the agency’s chargesheet, these entities allegedly created a synthetic financial network that circumvented Securities and Exchange Board of India (SEBI) regulations and misused public funds to serve mutual business interests.
The chargesheet asserts that funds were systematically disbursed, recycled, and repaid among Reliance ADA Group companies, Yes Bank, and Reliance Nippon Mutual Fund (RNMF). The objective was reportedly to conceal the financial stress of the group companies and present a misleading picture of financial stability to the market.
Quid-Pro-Quo Arrangement
CBI alleges that Anil Ambani and Rana Kapoor engineered a ‘quid pro quo’ system benefiting both parties. While Yes Bank provided large-scale funding to ADA Group companies, RNMF invested heavily in Yes Bank’s capital instruments, creating a circular flow of funds that artificially bolstered the financial health of both sides.
The agency claims that the arrangement was designed to bypass SEBI’s mutual fund investment rules, particularly the restrictions on investments in group or associate companies.
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Jai Anmol Ambani’s Role Under Scrutiny
The chargesheet also highlights the involvement of Jai Anmol Ambani, then associated with RNAM, in influencing investment decisions. RNMF had access to substantial public money from retail and institutional investors, intended for long-term debt instruments. Allegedly, these funds were redirected into group companies’ debt papers, benefiting private interests and violating regulatory norms.
Complex Transaction Structure
Investigations revealed that in July 2017, Morgan Credits Pvt. Ltd. (MCPL) — a promoter entity of the Kapoor family — issued ₹550 crore worth of non-convertible debentures (NCDs). These were approved by board members Radha Kapoor and Roshini Kapoor and subsequently allotted to RNMF.
Meanwhile, Reliance Home Finance (RHFL) had issued ₹250 crore in NCDs in December 2016, which Yes Bank struggled to sell due to a credit watch. On August 3, 2017, RNMF’s Debt Investment Committee approved the purchase of RHFL NCDs worth ₹249.8 crore.
CBI alleges that these two interconnected transactions enabled RNMF’s public investment funds to flow into MCPL, while Yes Bank offloaded its risky exposure to ADA Group securities without any loss.
High-Level Meeting and Subsequent Investments
According to the chargesheet, on October 6, 2017, Anil Ambani and Rana Kapoor held a high-level meeting to finalize their mutual investment strategy. Following this, Yes Bank proposed investments in ₹2,900 crore NCDs issued by ADA Group financial firms, including Reliance Capital, Reliance Commercial Finance, and RHFL.
In return, RNMF invested ₹1,750 crore in Yes Bank’s AT-1 bonds via private placement on October 18, 2017. This was followed by ₹500 crore in additional investments in two tranches on October 27 and December 4, 2017, taking the total exposure to ₹2,250 crore.
CBI contends that these transactions formed a quid-pro-quo arrangement — Yes Bank provided substantial funding to ADA Group companies, while RNMF invested in Yes Bank’s capital instruments, creating an artificial perception of financial stability.
Regulatory Violations and Misuse of Public Funds
The agency maintains that these transactions not only violated SEBI’s investment regulations but also misused public money to mask private corporate stress. CBI is currently scrutinizing the digital trail of funds, forensic accounting reports, and Jai Anmol Ambani’s involvement.
The chargesheet also notes the use of layering techniques across multiple stages of fund transfers, allegedly to obscure the true source of the money.
Lack of Response from Reliance ADA Group
As of Saturday evening, Reliance ADA Group had not responded to emailed queries. Financial analysts view the case as a significant lesson for corporate governance in India, highlighting how regulatory loopholes in the banking and mutual fund sectors can be exploited for private gain.
