Bombay High Court Halts 'Fraud' Proceedings Against Anil Ambani and RCom

The Bombay High Court has paused fraud classification proceedings against Anil Ambani and Reliance Communications initiated by three banks, citing violations of RBI guidelines. The court highlighted flaws in an audit report by BDO LLP, which was not signed by a CA, and noted the delayed actions by banks.

The Bombay High Court on Wednesday paused all fraud classification proceedings against Anil Ambani and Reliance Communications. The move came after a consortium of three banks allegedly failed to adhere to mandatory RBI guidelines, exhibiting what the court termed as 'banks waking up from deep slumber.'

Justice Milind Jadhav granted interim relief to Ambani and his company, preventing any immediate or future actions from Indian Overseas Bank, IDBI Bank, and Bank of Baroda. The banks' actions were based on a legally flawed forensic audit, which a BDO LLP report could not substantiate due to a lack of signature by a certified Chartered Accountant.

The court criticized the banks for their delayed response, describing it as a 'classic case' of negligence, leading to potential drastic consequences for Ambani, such as blacklisting and financial exclusion. The judge emphasized the importance of adhering to RBI's Master Directions and the principles of natural justice.

(With inputs from agencies.)