CBI Books Reliance Telecom and Former Directors in ₹115 Crore Loan Fraud Case

NEW DELHI – The Central Bureau of Investigation (CBI) has registered a First Information Report (FIR) against M/s Reliance Telecom Limited (RTL) and its former directors for allegedly defrauding the State Bank of India (SBI) of approximately ₹114.98 crore.
The case, filed by the agency’s Banking Securities and Fraud Branch (BSFB) in New Delhi, names then-directors Satish Seth and Gautam B. Doshi, alongside unknown public servants and others.

The Allegations

The FIR, registered on March 24, 2026, follows a formal complaint lodged by Jyoti Kumar, Deputy General Manager at SBI’s Stressed Assets Management Branch in Mumbai. The accused are booked under sections 120B (Criminal Conspiracy) read with 420 (Cheating) of the IPC, and sections of the Prevention of Corruption Act related to criminal misconduct.

The investigative agency alleges that between 2013 and 2017, the accused conspired to induce the bank into providing credit facilities through misrepresentation. Once the funds were disbursed, they were allegedly misappropriated and diverted in violation of the sanction terms.

Forensic Audit Reveals Deep Diversion

The fraud came to light following a forensic audit conducted by M/s BDO India LLP, which submitted its report on October 15, 2020. The audit, which covered the Reliance Communication (RCOM) Group (including RTL, RCOM, and Reliance Infratel), highlighted several grave irregularities:

• Fund Diversion: Approximately 41% (₹12,692.31 crore) of the total funds received by the group companies from various banks were utilized for payments to “connected parties”.
• Circuitous Transactions: The management allegedly moved funds through complex webs of associates and subsidiaries instead of direct transfers to the entities requiring the funds.
• Fictitious Debtors: The forensic auditor observed the creation and subsequent write-off of fictitious debtors through the issuance and sale of preference shares at significant losses (over 80%) on the same day.
• Intraday Limit Manipulation: The companies allegedly utilized intraday limits to finance circuitous cycles of transactions that allowed for the “refurbishing” of credit limits while reducing debtor balances in the books.

Legal Hurdles and Recovery Challenges

The account was officially re-classified as “Fraud” by SBI on February 21, 2026. This re-classification followed a period of reversal necessitated by a 2023 Supreme Court judgment (SBI vs. Rajesh Agarwal) which mandated that borrowers be given an opportunity to be heard before a fraud classification. The bank issued a Show Cause Notice to RTL in December 2023 and passed a reasoned order before re-initiating criminal action.

Recovery efforts for the bank have faced significant setbacks. While a resolution plan was previously approved by the Committee of Creditors (CoC), the Supreme Court ruled on February 13, 2026, that spectrum licensing rights are not part of the pool of assets available for insolvency or liquidation under the IBC. This ruling adjudged that spectrum cannot be sold to repay lenders, severely impacting the valuation of RTL’s remaining assets.

The CBI has entrusted the investigation to Deputy Superintendent of Police N. C. Nawal.