The Union Bank of India has started examination of a loan sanctioned to Reliance Communications (RCom) from the angle of fraudulent practice and has sought the company's response, according to a regulatory filing.
The company is undergoing an insolvency resolution process after it failed to clear vendor dues and other debt.
"Company has received a letter from Union Bank of India, with subject 'Examination of irregularities observed in the Loan Ac 495806390002088 and 495806390002240 from the fraud angle, as per the guidelines of Reserve Bank of India', asking to submit company's response or reply on the said irregularities as pointed out by Forensic Auditor," RCom said in a filing.
The Union Bank of India (UBI) in a letter, dated August 7, to RCom said the bank sanctioned from time to time various credit facilities for RCom's two loan accounts at the company's request.
The bank said that Reliance Communications failed to maintain the loan accounts according to the sanctioned terms, and consequent to the default committed by the company, the accounts became irregular or NPA (non-performing asset).
The UBI had appointed BDO India LLP as forensic auditor to investigate the matter after irregularities were found.
The forensic audit firm submitted its report on October 15, 2020, wherein certain serious irregularities or anomalies were pointed out by auditors which needed to be examined by a "competent authority to ascertain the incidence of fraudulent practices".
The bank has asked RCom to submit its response to the anomalies pointed out by the auditors within 15 days.
The UBI said in case, it does not receive any reply from RCom within the stipulated time period, it will construe that the company has nothing to say in the matter.
"Accordingly, the same will be placed before the appropriate committee for their decision on further action including identification of the loan account of M/s Reliance Communication Limited under fraud or otherwise, as per the extant guidelines as contained in the Master Directions of RBI on bank frauds," the letter said.