Reliance Power Unaffected by Bank of Baroda’s Action Against Anil Ambani and RCom

Quick Summary

• Reliance Power stated that its operations and financial standing remain unaffected by Bank of Baroda’s classification of Reliance Communications’ loan accounts and Anil Ambani as fraudulent.
• Bank of Baroda classified loans, totaling Rs 2,462.50 crore (with Rs 1,656.07 crore outstanding),granted to Reliance Communications over a decade ago as misutilized.
• Reliance Power clarified it is a separate entity from Reliance Communications and has no business or financial linkage to the latter. Additionally,anil Ambani has not been on its board for over 3.5 years.
• The recent action pertains to loans sanctioned more than ten years ago, with proceedings under review at judicial forums like NCLT and the Supreme Court for six years.
• At present, Reliance Communications operates under the supervision of a Commitee of Creditors led by SBI.

!Anil Ambani

Indian Opinion Analysis

Reliance Power’s statement provides clarity amidst concerns about potential contagion effects stemming from legal actions against Anil Ambani’s businesses. By emphasizing its independence from Reliance Communications, it seeks to reassure stakeholders. Though, given allegations regarding loans dating back a decade and ongoing judicial oversight concerning RCom’s insolvency resolution process, financial institutions might exhibit heightened caution in extending credit to entities tied historically or reputably to troubled conglomerates.

This serves as an important lesson on transparency for corporate governance in India’s business ecosystem-particularly ensuring clear separations between affiliate companies when facing legal scrutiny-or risk eroding investor confidence further.

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