Mumbai. A special court on Monday granted permission to the Central Bureau of Investigation (CBI) to arrest former Reliance ADAG Group senior executive Amitabh Jhunjhunwala in connection with a major bank loan misuse case. Jhunjhunwala was brought to Mumbai from Tihar Jail in Delhi on a production warrant, where he was already in judicial custody in a related money laundering investigation. After his appearance before the court, the CBI sought formal arrest approval, which was granted.
The case is considered one of the significant banking fraud investigations in the country, involving allegations against Reliance Communications and associated group companies for the misuse of loans obtained from various banks. According to the CBI, the matter relates to large-scale corporate borrowings sanctioned by a banking consortium, which were allegedly diverted, causing substantial financial losses to lenders.
Consortium Exposure and Fund Diversion
The agency informed the court that a consortium of 11 banks led by the State Bank of India had extended total exposure of approximately ₹19,694.33 crore to Reliance Communications. It is alleged that a portion of these funds was diverted from their intended purpose and used for other financial transactions, resulting in losses of around ₹2,929.05 crore to the banking system.
The CBI further stated that specific credit facilities included a ₹1,200 crore term loan sanctioned by SBI, ₹500 crore in letter of credit facilities from Bank of Maharashtra, and ₹350 crore in letter of credit facilities from Syndicate Bank. Investigators allege that these funds were not utilized in accordance with sanctioned conditions and were instead routed across group entities.
Chargesheet and Legal Arguments
In a recent development, the CBI has filed a chargesheet against 16 individuals and entities, including senior company executives and several bank officials. The accused have been charged with criminal conspiracy, cheating, and criminal breach of trust, along with offences under anti-corruption provisions. However, Amitabh Jhunjhunwala has not yet been formally named in the chargesheet, though investigation against him continues.
During the hearing, the court observed that given the seriousness of the allegations, granting permission for arrest under due legal process was justified. The defence, however, argued that under the terms of the production warrant, the accused was required to be produced on a specified date, and his earlier appearance was not in accordance with procedure. After considering all submissions, the court accepted the CBI’s plea.
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Deepening Financial Scrutiny
CBI officials stated that the investigation has moved beyond the preliminary stage and is now focused on detailed financial scrutiny of fund flows, loan utilization patterns, and inter-company transactions. The agency is also examining whether other individuals or entities played a role in the alleged diversion of funds.
Officials further indicated that the probe is still ongoing and additional names may emerge as financial trails and banking records are analyzed. The case continues to draw attention due to its scale, involving thousands of crores in public sector bank exposure and alleged systemic misuse of corporate lending mechanisms.
