MUMBAI: Bombay high court has said it’s evident that once a company account is declared as fraud, the promoter or directors in control of affairs would automatically be liable to penal measures, reported as fraud and debarred from raising funds or seeking credit facilities, as they were responsible for the acts or omissions of the company.The high court said so while dismissing Anil Ambani’s challenge to an SBI order that termed Reliance Communications’ (RCom’s) loan account as “fraud” and reported his name to Reserve Bank of India under fraud detection guidelines.SBI’s fraud tag on Anil & RCom has no infirmity: HCFor Anil Ambani, senior counsel Darius Khambata said despite the fact that there were no allegations against Ambani in a show-cause notice of December 2023, and he was not a whole-time director of the company, his name was reported. HC said the law was well settled and there was no need to spell out specific allegations against the promoter and director having control over the company, which, in this case, Ambani had during the relevant period. Ambani’s defence argued principles of natural justice were flouted as he was given no personal hearing before his name was reported too, and also similar orders against other non-executive directors were dropped. The HC, in a reasoned judgment available Tuesday, said “the role of the other directors, who were exonerated, was different and distinct from that of the present petitioner, inasmuch as they were non-executive directors and were not responsible for the day-to-day functioning of RCOM.”SBI had said it reported Ambani’s name under terms of Master Directions on Fraud Risk Management in Commercial Banks and All India Financial Institutions dated 15 July 2024. An HC division bench on October 3 found the SBI order to be a reasoned one sans any infirmity and Ambani’s petition challenging it with “no merit” and dismissed it. HC said the show cause notice detailed the basis of the declaration of fraud as contemplated by SBI. It said the erstwhile non-executive director failed to reply and continued to seek documents, leading to SBI finally proceeding to pass the order. HC said principles of natural justice don’t have a straitjacket formula, but so long as Ambani was “afforded an adequate opportunity to submit his objections in writing, the requirement of fairness and compliance with the principle of natural justice stood satisfied.”