New Delhi, Sep 5 (PTI) After State Bank of India and Bank of India, another lender Bank of Baroda has classified the loan account of insolvent Reliance Communications as fraudulent and named its former director, tycoon Anil Ambani, citing alleged misutilisation of loans granted more than a decade back, according to a regulatory filing.

RCom said it has received a letter from BoB dated September 2 conveying its decision to classify the loan account of the company and promoter Anil Ambani as "fraud".

Bank of Baroda had sanctioned Rs 1,600 crore and another Rs 862.50 crore in line of credit to the company. Of the total Rs 2,462.50 crore, Rs 1,656.07 crore remains outstanding as on August 28, according to the lenders' letter disclosed by RCom in the regulatory filing.

"The account was classified as non-performing asset (NPA) with effect from June 5, 2017," the letter said.

While RCom is undergoing corporate insolvency resolution proceedings to find a suitor to take over the company and clear its liabilities, BoB in the letter said currently there is no active resolution plan that is approved by the NCLT.

It went on to state that the declaration of fraud is based on findings/observations in forensic audit reports and "such classification is in line with the principles of natural justice".

In a statement, a spokesperson of Ambani said the action of Bank of Baroda pertains to matters dating back more than 12 years.

"It is pertinent to note that Anil D Ambani served as a non-executive director on the board of RCom from inception in 2006 until his resignation from the board in 2019, over six years ago," it said.

"He was never an executive director or a KMP of the company, and had no role whatsoever in the day-to-day operations or decision-making of the company," it said.

Stating that RCom had a lender consortium comprising 14 banks, it said, "after an inordinate lapse of more than 10 years, select lenders have now chosen to initiate proceedings in a staggered and selective manner targeting Mr Ambani".

It went on to state that RCom is under the supervision of a committee of creditors led by SBI and overseen by a resolution professional.

"The committee of creditors led by SBI had unanimously approved the resolution plan of the successful resolution applicant in March 2020. The matter remains sub judice, pending before the NCLT and other judicial forms, including the Supreme Court, for the past six years and the lenders have not taken steps to complete the resolution process," it said.

Ambani, the statement said, "Categorically denies all allegations and charges and shall pursue remedies available to him in accordance with legal advice." Previously, State Bank of India (SBI) and Bank of India (BoI) had given similar tags to RCom and Ambani.

Under banking laws, once an account is declared fraudulent, it must be referred to enforcement agencies for criminal action, and the borrower is barred from accessing fresh finance from banks and regulated institutions for five years.

RCom had in April disclosed that its total debt stood at Rs 40,400 crore in March.

Following unpaid loans, the company was admitted for insolvency and bankruptcy proceedings. PTI ANZ TRB TRB

Fraud classification of loan account triggers criminal referral and a five-year ban on obtaining fresh bank finance. Bank of Baroda classified the loan account of the insolvent corporate debtor and its former director as fraud based on forensic-audit findings, noting the account had been NPA since June 5, 2017, that no active resolution plan is approved by the adjudicating authority under the insolvency framework, and that the classification triggers referral to enforcement agencies and a statutory bar on access to fresh bank finance.