In a huge problem for Anil Ambani State Bank of India has decided to report the loan account in the name of Reliance Communications as ‘fraud’. The bank has also said that it will also report the name of the company’s erstwhile director Anil Ambani to the Reserve Bank of India Reliance Communications said in an exchange filing late July 1. What is the case? According to reports the company is accused of not using ₹250-crore loan for the purpose it was availed and the transaction was routed through related companies to conceal the source of fund. The company is under corporate insolvency resolution process and its affairs business and assets are being managed by the Resolution Professional Anish Niranjan Nanavaty with effect from June 28 2019. The company is protected from the institution or continuation of any suits or proceedings against itself in light of Section 14(1)(a) of the Insolvency and Bankruptcy Code. A resolution plan has been approved by the committee of creditors is presently awaiting approval of the Mumbai Bench of the National Company Law Tribunal the company said. The loan referred to in the SBI’s letter is related to the period prior to the corporate insolvency resolution process. What is the approved amount of loan? The bank found two transactions as misappropriation of funds and breach of trust. It was found that the company did not use ₹250-crore loan for the purpose it was availed and the transaction was routed through related companies to conceal the source of fund in order to avoid required regulatory approval in case of external commercial borrowing loans SBI said in its letter. The loan sanctioned by Dena Bank in 2017 was availed for the purpose of short term cash flow mismatch for payment of statutory dues sundry creditors but the company paid it to Reliance Communications Infrastructure as Inter-Corporate Deposit. However management has claimed that later this amount was used to repay ECB installment availed from BNP-Paribas. Another loan of ₹248 crore which was sanctioned by IIFCL for the purpose of meeting ongoing capital expenditure was paid to Reliance Infratel (₹63 crore) and RIEL (₹77 crore) for repayment of loans. These transactions were also routed through its subsidiary Reliance Communications Infrastructure SBI said.