A special court in Mumbai on Monday granted the Central Bureau of Investigation (CBI) permission to arrest Amitabh Jhunjhunwala, a former senior executive of the Anil Ambani-led Reliance Group, in connection with an alleged bank loan fraud case.
Jhunjhunwala was produced before Special CBI Judge J.P. Darekar on a production warrant from New Delhi's Tihar Central Jail, where he is currently under judicial custody in a related money laundering case being investigated by the Enforcement Directorate (ED).
Following his production, the CBI, represented by Special Public Prosecutor A. Limosin, moved an application seeking permission to formally arrest him and remand him to custody.
Counsel for Jhunjhunwala, advocates Reeti Upadhyay and Mudit Jain, argued that under the production warrant issued by a Delhi court, he was required to be produced before the Mumbai court only on June 5. They contended that his appearance before the court prior to that date was unlawful.
After hearing submissions from both sides, the court allowed the CBI's request to formally arrest the accused in accordance with the law.
However, since the proceedings extended beyond court hours, the agency informed the court that it would complete the arrest formalities and produce Jhunjhunwala again on Tuesday. Taking note of the late hour and the distance travelled by the accused from Delhi, the court described the circumstances as a "peculiar situation" and remanded him to judicial custody in the interim.
Jhunjhunwala, who served as Group Managing Director of Reliance Communications (RCom), was responsible for key functions including corporate finance, banking operations and fund utilisation.
According to the CBI, loan funds obtained from banks were managed and utilised by other RCom officials on Jhunjhunwala's directions. The agency has alleged that the misutilisation of these funds resulted in wrongful losses to lending banks.
The CBI on Friday filed a chargesheet against 16 individuals and entities in the case. While Jhunjhunwala has not been named as an accused in the chargesheet, the agency said investigations into his role remain ongoing.
Those named in the chargesheet include Reliance Communications, five of its senior executives and ten bank officials. They have been charged with criminal conspiracy, cheating and criminal misappropriation under the Indian Penal Code, as well as criminal misconduct under the Prevention of Corruption Act, according to a CBI statement.
The chargesheet relates to the alleged misuse of a Rs 1,200 crore term loan sanctioned by the State Bank of India (SBI), Rs 500 crore in letter-of-credit facilities extended by Bank of Maharashtra and Rs 350 crore in letter-of-credit facilities provided by Syndicate Bank.
The agency said further investigation remains open to examine other loans sanctioned by the banking consortium and to determine the role of additional individuals allegedly involved in the diversion and misappropriation of public funds.
The case was registered by the CBI on the basis of a complaint filed by SBI against Reliance Communications and Anil Ambani, alleging a loss of Rs 2,929.05 crore to the bank.
According to the FIR, rupee term loans were sanctioned to Reliance Communications by a consortium of 11 banks led by SBI. The total exposure in the case amounted to Rs 19,694.33 crore and involved 17 public-sector banks.
(With inputs from PTI)
