The Central Bureau of Investigation (CBI) has arrested Amit Bapna, former chief financial officer of Reliance Capital Ltd, in connection with the ongoing investigation into the Reliance ADA Group cases, according to a CBI spokesperson.
Background and Role of Amit Bapna
Bapna served as CFO at Reliance Capital Ltd from August 2014 to December 2019. The investigation has allegedly revealed that Bapna was one of the key decision-makers responsible for managing the company's financial affairs. He was already in judicial custody in a separate case being investigated by the Enforcement Directorate (ED) and was lodged in Tihar jail. To secure his custody in this new case, the CBI obtained a production warrant from the court.
Allegations of Loan Irregularities
According to a CBI spokesperson, Bapna "allegedly facilitated and approved loans to intermediary and conduit companies despite being aware that such lending was contrary to RBI guidelines and the sanction conditions governing borrowings from public sector banks."
The investigation further revealed that funds borrowed by Reliance Commercial Finance Ltd were diverted through such intermediary entities to various Reliance ADA Group companies, including Reliance Capital, Reliance Infrastructure, and Reliance Power, thereby causing wrongful loss to the lending banks and corresponding wrongful gain to the accused persons and related entities.
"Bapna allegedly facilitated and approved loans to intermediary and conduit companies despite being aware that such lending was contrary to RBI guidelines and the sanction conditions governing borrowings from public sector banks." — CBI spokesperson
Implications for Corporate Finance and Trade Finance
This case highlights critical compliance risks for CFOs and treasury directors at non-banking financial companies (NBFCs) and corporates. The alleged violation of RBI guidelines and sanction conditions underscores the importance of strict adherence to regulatory frameworks when structuring borrowings from public sector banks. For trade finance professionals, the diversion of funds through intermediary entities—potentially used to disguise connected-party lending—raises red flags for due diligence in supply chain financing and inter-corporate loans.
The involvement of multiple group entities suggests a complex web of related-party transactions. This reinforces the need for enhanced scrutiny of conduit companies in trade finance transactions, especially when funds flow to affiliates. The case also serves as a reminder of the legal consequences for finance executives who approve transactions that bypass regulatory norms.
Key Entities and Charges
| Entity | Role |
|---|---|
| Reliance Capital Ltd | NBFC where Bapna was CFO from 2014–2019 |
| Reliance Commercial Finance Ltd | Borrowing entity whose funds were allegedly diverted |
| Reliance ADA Group | Parent group receiving diverted funds |
| Reliance Infrastructure | Alleged beneficiary of diverted funds |
| Reliance Power | Alleged beneficiary of diverted funds |
| Public Sector Banks | Lenders who suffered alleged wrongful loss |
The CBI investigation is ongoing, and Bapna remains in custody. The case adds to the growing scrutiny of financial practices within the Reliance ADA Group and underscores the risks for lending institutions dealing with complex group structures.
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