Bombay High Court Shields Ambani Against Fraud Allegations

The Bombay High Court temporarily halted actions by three banks to label Anil Ambani and Reliance Communications' accounts as fraudulent. The court underscored that the forensic audit report, pivotal to the banks' claims, didn't comply with RBI's guidelines as it wasn't signed by a qualified chartered accountant.

The Bombay High Court issued a stay on Wednesday against efforts by three banks to classify the accounts of Anil Ambani and his company, Reliance Communications Ltd, as "fraudulent." The court found that the Reserve Bank of India's Master Directions were breached in the audit process by these banks.

Justice Milind Jadhav noted the forensic audit report was invalid as it lacked the signature of a certified chartered accountant, as per the 2024 RBI Master Directions on fraud. Any adverse actions could gravely harm Ambani and his company, the court order emphasized.

The court criticized the banks for their delayed actions, noting attempts to audit accounts from 2013 to 2017 were only initiated in 2019. Ambani argued that the audit, conducted by BDO LLP, was unqualified to conduct a forensic audit, while the banks claimed compliance with 2016 directions.

(With inputs from agencies.)