Why did SBI tag RIL as Fraud and why is it withdrawing the tag?

Why did SBI tag RIL as Fraud and why is it withdrawing the tag?

The State Bank of India which is one of the largest Public Sector Banks in the country and is one of the leading banks of the country. The bank had tagged Reliance Infratel Limited which is a company under the Anil Ambani group as Fraud and has recently announced that the bank is withdrawing the tag. Let’s look at why SBI is removing the Fraud tag from the company.

State Bank of India – Latest News
Why did SBI tag Reliance Infratel as Fraud?
Reason Why SBI is withdrawing the Fraud tag
Resolution plan of Reliance Infratel and Reliance communication
FAQ

State Bank of India – Latest News

On 9 June 2021, the State Bank of India had conveyed that they would choose to withdraw the tag placed on Reliance Infratel which is a Reliance company that comes under the Anil Ambani group which is a Reliance communications tower and Fiber company. The bank had filed an affidavit in NCLT Mumbai stating that they would want to remove the Fraud tag on the company.

Why did SBI tag Reliance Infratel as Fraud?

Reliance Infratel is a bankrupt company that owes a lot of debt in the market majorly to many other investors. The company has around 13 lenders and some of the claims from the investors include State Bank of India – INR 3,628. 68 crores, Syndicate Bank – INR 1,225.18 crore, Bank of India – INR 1,064. 82 crore and also from the Industrial and Commercial Bank of China (ICBC) – INR 1,832.91 crore. These are the major lenders of the company.

Apart from these, there were a lot of financial creditors the company owed money to. Since the company owed a lot of money and had also recorded bankruptcy the State Bank of India had tagged the company as Fraud.


Why SEBI Imposed 25 crore penalty on Mukesh Ambani, Anil Ambani, others
There was a recent news headlines which said SEBI has slapped INR 25 crore fineon Ambani’s due to the 2000 case over the allegation of violation of thetakeover code regulations. Let’s look at the below article to get a clearunderstanding about the regulation and the reason for imposing the fine.…

Reason Why SBI is withdrawing the Fraud tag

The Reliance Industries Group which is owned by Mukesh Ambani had been a resolution partner for Reliance Infratel. Reliance Industries Reliance Projects and Property Management Service had been successful in being the resolution partner in the Corporate Insolvency Resolution Process (CIRP) and also won the right to acquire a 100 % stake in the shareholding of Reliance Infratel Ltd.

The resolution order was given by the NCLT which awarded the Reliance Infratel company to the Reliance Industries owned by the Mukesh Ambani as on 3 December 2020 but then SBI had already classified the company as Fraud on 10 November 2020 and later on SBI had withheld this information before the NCLT before it gave the order.

The Fraud tag being classified by the bank and withholding it from the NCLT is considered to be a grave error and the State Bank of India also did not upload the same on the CRILIC website for 45 days until 21 December 2020 which is considered to be against the norms and violating the principles. Later the bank also filed a complaint to the CBI on the directors of Reliance Infratel.

One of the major reasons for the removal of the tag was because after the complaint being filed to the CBI, Reliance Infratel had moved to the High Court of India on 6 January 2021 and got a stay regarding the actions taken by the State Bank of India.

The court also ordered the CBI to not to take any actions on the complaint filed by the State Bank of India. Later on, the State Bank of India had moved towards withdrawing the Fraud tag which it had posted against Reliance Infratel by filing an affidavit in order to declassify it before the NCLT Mumbai.


Why did Yes bank took over Reliance Centre headquarters for 1200 Crore
There was a recent news where the headquarters of Reliance ADAG group which washeaded by Anil Ambani, the Reliance Center, Santacruz, Mumbai was sold to YesBank for INR 1,200 crores. Let’s look at the reason and the details for the saleof Reliance’s headquarters. What is Reliance Infrastructure…

Resolution plan of Reliance Infratel and Reliance communication

The dedicated insolvency court had provided a nod to the resolution plan of Reliance Infratel by providing 100 % shareholding towards Reliance Communication. The Reliance Jio Infocomm has received the permission to pick the tower and the fiber assets of the Reliance Infratel which is a bankrupt company.

Conclusion

It is said that the lenders are expected to take a 60 % of the 100% stake through the Asset monetization plan of the tower company. According to the plan provided by NCLT, the lenders are expected to recover an amount of INR 4000 crore through the resolution plan of the company.

FAQ

Who owns Reliance Infratel?

The Reliance Jio Infocomm received the permission from the court to pick the tower and the fiber assets of the Reliance Infratel which is a bankrupt company.

Why did SBI tag Reliance Infratel as Fraud?

Since the company owed a lot of money and had also recorded bankruptcy the State Bank of India tagged the company as Fraud.

Why did SBI Withdraw the fraud tag?

As the Reliance Industries Group which is owned by Mukesh Ambani had been a resolution partner for Reliance Infratel and has acquired a 100 % stake in the shareholding of Reliance Infratel Ltd, SBI had to withdraw the fraud tag.

Must have tools for startups - Recommended by StartupTalky

Read more