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CBI charges RCom over an alleged 3,750 crore loss at LIC

The Central Bureau of Investigation filed a charge sheet against Reliance Communications and three named people over an alleged loss of 3,750 crore rupees at the Life Insurance Corporation. The agency says LIC put 1,500 crore rupees into RCom debentures in 2012 and that the money was diverted inside the group. The filing is a set of allegations before the special court in Mumbai, not a court finding of guilt. Nine related cases and seven earlier charge sheets sit around this one.

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Seen from behind, a man in a gray vest passes a closed brown folder to a clerk through a wooden registry opening beside India’s flag.

The charge sheet names RCom and three people

The Central Bureau of Investigation filed a charge sheet against Reliance Communications and three individuals before the special CBI court in Mumbai. The named people are Amitabh Jhunjhunwala, former managing director of the Reliance ADA group, Vishwas Joshi, former senior vice-president of Reliance Capital, and P. Venugopal, who was LIC’s chief investment officer. The account also refers to others besides those named executives. The alleged offences are criminal conspiracy, cheating and criminal breach of trust under the penal code, plus offences under anti-corruption law. These are the agency’s allegations. A court has not found guilt.[1], [2]

The CBI said four accused were charged under the erstwhile Indian Penal Code and the Prevention of Corruption Act. It said further investigation continues, to look at other people and other allegations. Seven arrests across the wider inquiries do not mean every defendant in this filing was arrested for this case. The group had given no official response when the Mumbai report was prepared. No plea from the named individuals or the companies is recorded in that account.[1], [2]

The alleged LIC loss is 3,750 crore rupees

The agency says LIC subscribed in 2012 to non-convertible debentures issued by RCom, worth 1,500 crore rupees, on the basis of serious misrepresentations. It says the proceeds were then diverted to group companies. The alleged loss is 3,750 crore rupees. The subscription and the alleged loss are different amounts. The case was registered on 1 April after a complaint from LIC. Registration is the opening of the case. It is not a judgment.[1], [2]

The agency describes that diversion as a wrongful loss for LIC and a matching wrongful gain for the accused people and companies. The debentures do not convert into shares, so the subscription was a debt claim on RCom rather than an equity stake. The 1,500 crore subscription and the 3,750 crore allegation have to stay side by side, because the second figure is the case total and not another name for the first. A court has not accepted those figures as proved. The complaint that opened the case came from LIC itself, and the charge sheet is the agency’s account of what it says happened after that complaint.[1], [2]

Nine cases and seven earlier charge sheets surround this filing

Nine first information reports cover RCom, Reliance Home Finance, Reliance Commercial Finance, Reliance Telecom and other group entities, after complaints from public-sector banks, LIC and the Employees’ Provident Fund Organisation. Seven charge sheets had already been filed, and the new filing is the eighth. The investigation is monitored by the Supreme Court. The CBI says it remains committed to an expeditious and comprehensive investigation. The Mumbai account, when it was prepared, had no official reply from the group to set beside those allegations.[1], [2]

References

  1. News sourceThe HinduCBI charges RCom and three people over an alleged 3,750 crore loss to LIC↩1↩2↩3↩4↩5
  2. News sourceFree Press JournalRCom and three individuals charged in LIC investment investigation↩1↩2↩3↩4↩5
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