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Informist, Wednesday, Dec. 24, 2025

 

NEW DELHI – The Bombay High Court Wednesday stayed the move by a consortium of banks to declare industrialist Anil Ambani's bank account as fraud. Ambani, chairman of the Anil Dhirubhai Ambani Group, said his account was declared fraud on the basis of an "illegal report" by forensic auditor BDO India LLP. He said BDO India was not recognised as an "auditor" under the Reserve Bank of India's revised master directions on fraud issued in 2024.

 

"It is preposterous to accept the argument of banks that an external auditor not having Chartered Accountant qualifications could be validly appointed under the 2016 RBI Master Directions for External Audit," the high court said. The consequences of allowing the banks to proceed further and declare the accounts of Ambani and directors of Reliance Communications Ltd., Reliance Infratel Ltd. and Reliance Telecommunication Ltd. as fraud are virtually drastic and lead to disastrous consequences like being black-listed, barred from new bank loans, criminal first information report filing, damage to reputation, impacting fundamental rights to financial access and civil death, said the court.

 

Based on BDO India's forensic audit, the consortium of banks, which includes Indian Overseas Bank, IDBI Bank and Bank of Baroda, declared Ambani and others' accounts as fraud. In 2024, the RBI revised its master directions that said the external auditor appointed by banks should be auditor under the Companies Act, 2013, meaning it has to be registered with the Institute of Chartered Accountants of India.

 

Ambani said that BDO India does not meet the criterion under RBI's revised master circular of 20924 and was, therefore, not competent to carry out any audit, including a forensic audit. Ambai said that BDO India, which describes itself as offering assurance, tax, advisory, business services and digital services, does not claim to be a qualified auditor under Indian law and is not registered with Institute of Chartered Accountants of India. Any fraud proceedings based on such a report are illegal, said Ambani.

 

Earlier this month, Anil Ambani had moved the Supreme Court against a Bombay High Court order that upheld State Bank of India's decision to classify his loan account as well as the company's as fraud. In June, the bank had classified the loan account of Ambani and Reliance Communications as fraud for deviation of funds in a 2016 case. SBI alleged that Ambani had misappropriated bank funds by entering into transactions that violated the terms of the loans. Thereafter, the Central Bureau of Investigation lodged a case against Ambani for alleged bank fraud that led to a loss of over INR 29.29 billion to SBI. Other banks have also passed similar orders against Ambani and Reliance Communications.  End

 

Reported by Surya Tripathi

Edited by Avishek Dutta

 

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