Union Bank of India flags Reliance Communications as fraud

Reliance Communications (RCOM) and its subsidiary, Reliance Telecom (RTL), received letters from Union Bank of India on December 08, 2025, notifying them that their loan accounts have been classified as "Fraud." This classification stems from a forensic audit conducted by BDO India LLP, dated October 15, 2020, which identified prima facie elements of fraud in the operations and actions of the borrower companies.

The audit revealed irregularities in the utilization of bank loans, potential routing of loan funds, and transactions related to preference shares and fictitious debtors. Specifically, RCOM and RTL were found to have cumulatively received INR 31,580.00 Crs from banks, with a significant portion utilized for payments to connected parties and other unapproved purposes. The forensic report also highlighted concerns regarding intercompany loan transactions, investments, mis-utilization of sales invoice financing, discounting of bills, and movements of funds through inter-corporate deposits.

Both RCOM and RTL are currently undergoing corporate insolvency resolution processes, and their respective resolution plans have been approved by the committees of creditors and are awaiting approval from the National Company Law Tribunal. Union Bank of India's decision to classify these accounts as fraud will be reported to the Reserve Bank of India and law enforcement agencies for further investigation.