Two Anil Ambani Firms Secure Delhi HC Relief Over ‘Fraud’ Account Classification by Banks

The court declared that decisions made by the Bank of Baroda and Punjab National Bank to classify the accounts as fraud shall be kept in abeyance.

New Delhi: The Bank of Baroda and Punjab National Bank (PNB) had classified the accounts of two Anil Ambani companies as ‘fraud’, a development which prompted the firms to recently move the Delhi high court and secure a stay on the actions of the two public sector lenders.

“We hereby inform that in the writ petition filed by the company challenging the wrongful action of Bank of Baroda, the lender and lead bank of consortium, of classifying the company’s account as a fraud, the Delhi high court has by way of an order dated August 14, 2020 directed that placing of the company in the category of ‘Fraud’ shall be kept in abeyance…,” Reliance Home Finance said in a statement to the stock exchanges.

“The [Delhi HC] in a separate petition by way of order dated August 11, 2020 directed [the] Punjab National Bank to maintain status-quo in relation to its classification of the company’s account as a fraud,” the statement added.

A nearly identical statement was sent by Reliance Commercial Finance Ltd to the stock exchanges.

These Anil Ambani companies have been in the spotlight since 2019 over worries of potential fraud. In June 2019, Price Waterhouse and Co Chartered Accountants (PwC) resigned as one of the statutory auditors of Reliance Home Finance, citing an inability by the company to satisfactorily resolve “certain observations/transactions” which could be significant or material to the financial statements of both companies.

Media reports later said that PwC suspected an alleged diversion of funds and had informed the ministry of corporate affairs of their suspicions.

Consequently, it appears that both the lenders and the Anil Ambani company conducted a forensic probe. In January 2020, Reliance Home Finance and Reliance Commercial Finance declared that an independent forensic audit had found no evidence of either fraud or diversion of funds.

“The forensic auditors have submitted their report, and there are no adverse findings recorded on 11 key parameters, including diversion and siphoning of funds; embezzlement, malafide operations, falsification of accounts, fraudulent transactions and frauds,” Reliance Home Finance said.

However, two weeks ago, two business newspapers (Mint and the Economic Times) both reported that the PNB had classified its exposure to Reliance Home Finance as a ‘fraud’ account. While the Mint report declared that the forensic audit report was “inconclusive”, the Economic Times quoted a source as saying the audit report “proved” there was an alleged diversion of funds.

It is unclear whether the audit report mentioned in the news stories is the same forensic probe that the Anil Ambani companies had cited while declaring there was no fraud back in January 2020.

According to reports, the primary legal objection of both companies is that they were not given a hearing before the public sector lenders decided to proceed with the fraud classification.

In their petition against PNB, both Anil Ambani companies said that although the consortium of lenders met on June 6, no notice was sent to them and even the minutes of the meeting were not provided.

“On 28 July 2020, petitioner number one, it is stated, was shocked to learn from the queries raised by the media that respondent number one [PNB] has classified the account of petitioner number one as a fraud. It appears that respondent number one had informed the other banks of such classification,” said the high court order.

Total outstanding loans to Reliance Home Finance as of July 2019 stood at Rs 7,109 crore. Reliance Commercial Finance’s total borrowings stood at Rs 9,812.9 crore as of March 31.

ISRO Is Not Going to Mine the Moon for Helium-3

Multiple news outlets had quoted Sivathanu Pillai’s statements out of context. The last thing science reporting needs is fake news.

Multiple news outlets had quoted Sivathanu Pillai’s statements out of context. The last thing science reporting needs is fake news.

Credit: Ponciano/pixabay

Credit: Ponciano/pixabay

Bengaluru: On April 20, 2017, Livemint reported that the Indian Space Research Organisation (ISRO) has plans to mine helium-3 from the Moon to help manage India’s energy needs. ISRO has no such plans. Even if we supposed that it did, they would be grossly premature. There is neither the technology anywhere in the world to use helium-3 to generate energy nor are the legal and logistical hurdles fully understood.

The report is referring to comments made by the noted space scientist Sivathanu Pillai at the Observer Research Foundation’s Kalpana Chawla Space Policy Dialogue 2017, held in New Delhi in February. Those who attended the conference say that Pillai had said mining helium-3 from the Moon was possible – but that he didn’t say anything about ISRO planning to do it.

One attendee put it thus: “He was describing the technological landscape. He reviewed the technology from a century ago and connected it to today, and then he gave a glimpse of the possibilities of tomorrow.”

According to multiple sources on the web, helium-3 is a valuable type of fuel for purportedly ‘cleaner’ nuclear fusion. However, nuclear fusion has not been achieved on Earth even with the lighter, and thus  more easily fuseable, atoms of deuterium and tritium, both isotopes of hydrogen.

“Although helium-3 fusion may be an attractive alternative if sufficient quantities can be mined and transported at an economical rate, the main difficulty is technological,” Jayant Murthy, a senior professor at the Indian Institute of Astrophysics, Bengaluru, told The Wire. “Helium-3 fusion requires temperatures much higher than the deuterium-tritium fusion that is the basis of current fusion research. It would only be prudent to wait until the technology is mature before even planning for helium-3 extraction from the Moon.”

He added that there were still no commercial fusion reactors even if there have been promising results from attempts to achieve one. For example, the National Ignition Facility, California, has been stepping closer to achieving inertial containment fusion. On the other hand, the multibillion-dollar International Thermonuclear Experimental Reactor (ITER), France (in which India has invested), continues to be delayed with the construction of its magnetic confinement reactor. Neither is designed to work with helium-3, however.

Then again, the technological barrier hasn’t deterred everyone. Public and private enterprises around the world have expressed interest in mining the Moon – either for helium-3 or for lunar water, and perhaps storing the former until a suitable reactor is built. This isotope of helium is not available on Earth because it is emitted by the Sun in its solar wind, and the wind is prevented from reaching Earth’s surface by our magnetic field. The Moon has no such shield and so its surface is believed to have been absorbing helium-3 for eons.

Even others have questioned the wisdom of using helium-3 for nuclear fusion altogether. The most prominent critique was penned by physicist Frank Close for Physics World in August 2007. He wrote that in a reactor like ITER’s tokamak – a donut-shaped hollow in which light atoms are confined by magnetic fields, heated to 150 million degrees C, made to form a plasma and then fused – “deuterium reacts up to 100 times more slowly with helium-3 than it does with tritium”. This is why, as Murthy said, the reactor has to reach temperatures far beyond what are currently being planned. Close concluded writing, “The lunar-helium-3 story is, to my mind, moonshine.”

The ITER tokamak will be used to generate and sustain a plasma (the pink tubular entity) for nuclear fusion. Notice the image of a man on the bottom-left for scale. Credit: US ITER

The ITER tokamak will be used to generate and sustain a plasma (the pink tubular entity) for nuclear fusion. Notice the image of a man on the bottom-left for scale. Credit: US ITER

And then there’s the jurisprudential barrier. According to Ashok G.V., an advocate and space law expert, Moon-mining is a “very, very dicey area”. He explained that the sole legislative document here is the Outer Space Treaty (OST). It permits mining on extraterrestrial bodies subject to a clutch of riders. For example, before it can begin work, ISRO will have to notify all stakeholders of its plans and also consult with those whose operations might be affected by ISRO’s.

And overall, as Ashok put it, “The traditional spacefaring nations have argued that what is not specifically prohibited by the OST is permitted. The resource-restricted agencies like India’s and others have argued that what has not been specifically permitted is prohibited.” The expanding grey area between these two points of view has resulted in calls for the OST to be overhauled.

None of this is to disparage ISRO’s plans to visit the Moon. It’s only that there is much more to explore about the satellite than is visible through the blinders of resource extraction. As Murthy said, “Going to the Moon is justification in itself – it doesn’t require manufactured reasons.”

Shortly after the Livemint story had come online, India TV quoted it in a report of its own, with not a detail changed. In fact, before either publication, the Indo-Asian News Service (IANS), a news syndication agency, had published an article on February 19, 2017, making the same claims: that Pillai had said helium-3 extraction was a “priority programme” for ISRO and that the agency would move to mine, transport and utilise the substance by 2030. This version had been picked up by Financial Express, India TodayTimes of India and NDTV, among others. IANS once published a hollow claim that Albert Einstein’s general theory of relativity is wrong. The last thing science reporting needs is fake news, and to think these four publications have a combined Twitter following of over 23 million…

The misinterpretation of Pillai’s comments also filled the void of ISRO’s silence, in keeping with its general lack of public engagement. If ISRO doesn’t act like an antibody and clarify its position when stories like these are being written, there is no surprise about the stories going viral.

The author of the Livemint report could not be contacted for comment. This article will be updated as and when a response becomes available.

Note: This article was edited on April 23 to better clarify the status of ITER.