A Special CBI Court remanded Amitabh Jhunjhunwala, former Group Managing Director of Reliance Communications, to CBI custody until June 5 in an alleged bank loan fraud case. The agency sought custodial interrogation as part of its investigation into a suspected large-scale financial fraud involving Reliance Communications and related group entities.
A Special CBI Court has remanded Amitabh Jhunjhunwala, former Group Managing Director of Anil Ambani-led Reliance Communications, to CBI custody until June 5 in connection with an alleged bank loan fraud investigation. The order was passed after the agency sought his custodial interrogation as part of its probe into an alleged large-scale financial fraud involving Reliance Communications and associated group companies.
The agency informed a Mumbai court that Jhunjhunwala played a crucial role in obtaining a Rs 1,200 crore loan from the State Bank of India (SBI) in 2016, which subsequently remained unpaid, allegedly causing a loss of Rs 971.25 crore to the public sector bank.
The allegations emerged during proceedings before a special CBI court, where the agency sought custodial interrogation of Jhunjhunwala as part of its probe into an alleged large-scale loan fraud involving Reliance Communications and its group entities. The court accepted the CBI’s request and remanded him to agency custody until June 5.
Jhunjhunwala was already lodged in Tihar Jail in connection with a separate money laundering investigation being conducted by the Enforcement Directorate (ED). On Monday, he was produced before Special CBI Judge J.P. Darekar through a production warrant. Following procedural formalities, the CBI formally arrested him in the present loan fraud case.
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The federal agency subsequently sought five days of custodial interrogation, represented before the court by Special Public Prosecutors A. Limosin and Jitendra Sharma.
Submissions of CBI and the Defence
According to the CBI, Jhunjhunwala was not merely a senior executive but a central figure overseeing several critical aspects of Reliance Communications’ financial operations. The agency submitted before the court that, as Group Managing Director, he exercised substantial control over corporate finance decisions, banking relationships, and the utilisation of funds borrowed from financial institutions.
Investigators claimed that funds obtained from various banks were deployed under his directions and that the alleged diversion and misuse of those funds ultimately resulted in significant financial losses to lending institutions.
The agency further argued that Jhunjhunwala possesses exclusive knowledge regarding the movement of funds and could provide crucial information about the ultimate beneficiaries of the allegedly diverted loan amounts. This, according to the CBI, makes his custodial interrogation necessary for uncovering the full extent of the alleged conspiracy.
The investigating agency informed the court that custodial interrogation was necessary to unravel the alleged criminal conspiracy involving company executives, promoters, representatives, and potentially public servants.
The CBI asserted that further questioning could help identify the individuals who ultimately benefited from the allegedly diverted funds and clarify the chain of decisions leading to the alleged financial irregularities.
Opposing the CBI’s request, defence counsel Mudit Jain argued that Jhunjhunwala had not been named as an accused in the charge sheet already filed by the agency.
The defence further contended that he had earlier cooperated with investigators and had been summoned merely as a witness to record his statement. It was submitted that he had no direct involvement in any alleged criminal activity and should not be subjected to custodial interrogation.
Despite these submissions, the court accepted the CBI’s arguments regarding the necessity of further investigation and remanded Jhunjhunwala to CBI custody until June 5.
Background of the Alleged Loan Fraud
The case originates from a complaint filed by the State Bank of India against Reliance Communications, its promoter Anil Ambani, and others. Based on the complaint, the CBI registered an FIR on August 21, 2025. The complaint alleged that SBI had suffered a wrongful loss of Rs 2,929.05 crore due to the actions of the company and its management.
The investigation pertains to loans granted by a consortium of public sector banks led by SBI. According to the CBI, a consortium comprising 11 banks had sanctioned rupee term loans to Reliance Communications, while the overall exposure of 17 public sector banks reportedly stood at Rs 19,694.33 crore.
The CBI recently filed its first charge sheet in the matter against 16 accused persons. Interestingly, Jhunjhunwala was not named as an accused in that charge sheet. However, the agency maintained before the court that his role in the financial transactions and loan management required deeper scrutiny. It argued that his interrogation was essential for tracing fund flows and understanding the decision-making process behind the utilisation of borrowed funds.
According to the CBI’s investigation, Reliance Communications and its subsidiary companies Reliance Infratel Limited (RITL) and Reliance Telecom Limited (RTL) collectively borrowed approximately Rs 31,580 crore from various financial institutions.
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The agency stated that out of this amount, Rs 13,667.73 crore, constituting nearly 44 percent of the total borrowing, was used for repayment of existing loans and obligations owed to banks and financial institutions. However, investigators alleged that another Rs 12,692.31 crore, amounting to roughly 41 percent of the total funds, was routed through connected third parties and transferred among group entities through allegedly manipulated accounting entries.
The CBI contends that these transactions indicate a deliberate scheme to divert and conceal the actual utilisation of borrowed funds. One of the major transactions under scrutiny involves a purported “Capital Advance” of Rs 5,300 crore extended by Reliance Communications to Netizen Engineering Private Limited.
According to investigators, Netizen Engineering was allegedly managed by individuals associated with RCOM. The agency claims that the advance was not genuinely intended for the procurement of capital goods as represented. The CBI alleges that the transaction bears characteristics of round-tripping and was part of a larger strategy to move funds through interconnected entities while disguising their actual destination and purpose.
The CBI specifically highlighted Jhunjhunwala’s role in securing a Rs 1,200 crore term loan from SBI in August 2016. According to the agency, Jhunjhunwala personally submitted the loan application on behalf of Reliance Communications. The loan was subsequently sanctioned and disbursed by SBI.
However, investigators claim that the loan was never repaid, resulting in a wrongful loss of Rs 971.25 crore to the bank. The agency argued that Jhunjhunwala served as the principal liaison between the company’s management and senior banking officials and therefore holds critical information regarding how the borrowed funds were utilised after disbursement.
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