Reliance Power Share Price Falls Over 5% As ED Seizes ₹2,033 Crore Assets In FEMA Investigation Against Anil Ambani Group

Reliance Power shares came under pressure on Thursday after the Enforcement Directorate (ED) seized Indian assets worth ₹2,032.81 crore in a Foreign Exchange Management Act (FEMA) investigation involving the Anil Ambani-led group company.

The action concerns alleged irregularities in overseas investments and transactions involving entities incorporated in the British Virgin Islands (BVI), the Cayman Islands and other jurisdictions. The agency is investigating whether funds raised abroad were diverted through overseas entities using documents that allegedly misrepresented the nature of the transactions.

Reliance Power has contested the allegations. In a regulatory filing, the company said it would take all appropriate steps, based on legal advice, to safeguard its interests and those of its shareholders and other stakeholders.

Reliance Power Share Price Movement

Reliance Power shares fell 4.69% to ₹18.90 on Thursday, 15 October, as the Enforcement Directorate's asset seizure intensified pressure on the stock. The shares were down ₹0.93 from the previous close of ₹19.83, according to the latest available market data at 12.20 pm IST.

The stock opened at ₹19.71 and touched an intraday high of ₹19.79 before slipping to a low of ₹18.69. The intraday chart showed the shares trending lower through much of the morning session, with a modest recovery towards the latest quoted price.

What Triggered The ED Investigation?

The seizure order was issued on 12 October under Section 37A of FEMA. The assets include Reliance Power's bank balances and its shareholding in Sasan Power Ltd.

According to the ED, the investigation followed action by the Securities and Exchange Board of India (SEBI) concerning write-offs or provisions of ₹2,101.46 crore recorded in the company's accounts. These related to overseas investments and advances involving entities in offshore jurisdictions.

The agency's investigation traces the transactions to 2006, when Reliance Natural Resources Ltd, subsequently merged with Reliance Power, raised $300 million through foreign currency convertible bonds.

ED Alleges Overseas Fund Diversion

The ED said $275 million from the bond proceeds was invested in the company's wholly owned Singapore subsidiary, Reliance Natural Resources (Singapore) Pte Ltd. The subsidiary subsequently deposited the funds with Deutsche Bank (Suisse) SA in Geneva, where they were used as collateral for loans to BVI-incorporated entities.

The agency alleges that these entities were controlled from India by the Reliance Anil Ambani Group through intermediaries acting on its instructions.

The allegations centre on three issues:

• Fund diversion: Loan proceeds were allegedly channelled into transactions that benefited the group. These included the temporary movement of funds back into India through entities based in Mauritius.

• Unrepaid loans: The BVI entities allegedly failed to repay loans extended by Deutsche Bank.

• Fabricated documentation: The ED alleges that documents were backdated to make the transactions appear legitimate. They were presented as business advances from the Singapore subsidiary and Indonesian subsidiaries of Reliance Power.

What Happens Next?

The investigation remains centred on the alleged overseas transactions and the circumstances surrounding the movement of funds. Reliance Power has said it will pursue appropriate steps to defend its position.

The seizure places the company's overseas financial dealings under scrutiny. Further developments will depend on the investigation, the evidence examined by the authorities and the company's response to the allegations.

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