LIC alleges massive diversion of public funds, fake security cover and financial misrepresentation; CBI launches probe into RCOM loan transactions
New Delhi/Mumbai:
The Central Bureau of Investigation (CBI) has registered a First Information Report (FIR) against Reliance Communications Limited (RCOM), its former Chairman Anil Dhirubhai Ambani, unknown public servants and other unidentified persons in connection with an alleged financial fraud involving Life Insurance Corporation of India (LIC) worth ₹3,750 crore.
According to the FIR filed by the Banking Securities & Fraud Branch (BS&FB), Delhi, the case pertains to investments made by LIC in secured Non-Convertible Debentures (NCDs) issued by Reliance Communications between 2009 and 2012.
The complaint, submitted by LIC’s Regional Manager (Legal & HPF) Manoj Kumar Tejan on March 24, 2026, accuses the company and its management of criminal conspiracy, cheating, criminal breach of trust and financial misconduct under various provisions of the Indian Penal Code and the Prevention of Corruption Act.
LIC Investment and Alleged Loss
As per the FIR, LIC subscribed to two tranches of secured NCDs issued by RCOM — ₹3,000 crore on March 2, 2009 and another ₹1,500 crore on February 1, 2012 — taking the total exposure to ₹4,500 crore. Out of this amount, the principal outstanding currently stands at ₹3,750 crore.
More Read
The complaint alleges that LIC invested the money based on representations made by RCOM regarding the company’s financial position, repayment capacity and the adequacy of the securities offered against the debentures.
However, a forensic audit later allegedly revealed that the company had diverted large portions of the borrowed funds and had misrepresented the actual value of assets offered as collateral.
Allegations of Fund Diversion
The FIR cites a forensic audit report dated October 15, 2020, prepared by BDO India LLP, which allegedly uncovered systematic diversion and siphoning of funds raised from banks and financial institutions.
More Read
According to the complaint:
- Around ₹13,667 crore was allegedly diverted towards repayment of other loans and liabilities.
- Approximately ₹12,692 crore was allegedly transferred to connected and related parties.
- Thousands of crores were allegedly routed through subsidiaries and shell entities using layered financial transactions.
The complaint further alleges that several transactions involved fictitious invoices, circular fund movements and manipulated accounting entries designed to conceal the true financial condition of the company.
Security Cover Allegedly ‘Illusory’
One of the major allegations in the complaint concerns the security cover offered to LIC against the debentures.
According to the forensic audit findings cited in the FIR, RCOM and associated entities had created charges worth ₹49,111.47 crore in favour of lenders, while the total combined asset value of the group entities stood at only ₹26,163.43 crore.
LIC alleged that the company projected inflated and misleading asset coverage ratios in order to induce the public insurer into investing in the debentures.
The complaint states that the securities offered were either over-encumbered or insufficient, making the so-called “secured” instruments effectively unreliable.
Role of Anil Ambani Under Scanner
The FIR names Anil Dhirubhai Ambani as Accused No. 2, identifying him as the erstwhile Non-Executive Director and Chairman of RCOM during the relevant period.
The complaint alleges that, as the promoter and senior-most figure in the company’s management, Ambani exercised substantial influence over financial decisions, capital raising activities and deployment of funds.
CBI has also kept the role of unknown public servants and private individuals under investigation, stating that the possibility of criminal conspiracy and misconduct cannot be ruled out.
RCOM Already Under Insolvency Proceedings
RCOM has been undergoing Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code since May 2018 before the National Company Law Tribunal (NCLT), Mumbai Bench.
LIC, being a financial creditor and member of the Committee of Creditors (CoC), has informed investigators that recovery under the pending resolution plan is expected to be only a small fraction of the outstanding dues, causing substantial loss to policyholders’ funds.
CBI Begins Investigation
The FIR has been registered under Sections 120-B, 406 and 420 of the IPC along with provisions of the Prevention of Corruption Act.
CBI officials stated in the FIR that the allegations disclose cognizable offences involving cheating, criminal breach of trust and possible criminal misconduct linked to public funds.
The investigation is expected to examine fund trails, corporate transactions, regulatory disclosures and the role of company officials as well as other entities connected to the alleged diversion of funds.
