Shares of Reliance Power dropped 4.16% to their day’s low of Rs 50.65 on the BSE, while Reliance Infrastructure slid nearly 5% to an intraday low of Rs 312.
Ambani has been directed to appear before the agency on August 5 at the ED’s headquarters in the national capital. The summons comes amid an ongoing investigation into financial irregularities linked to companies within the Reliance Group.
The ED’s action follows a series of searches conducted last week at multiple premises associated with the group. According to officials aware of the matter, searches were carried out at 35 locations across Mumbai, encompassing 50 companies and 25 individuals. These actions were conducted under the provisions of the Prevention of Money Laundering Act (PMLA).
The agency’s investigation reportedly focuses on the suspected diversion of loan funds and other financial irregularities allegedly committed by companies associated with the Reliance Group. Previous ET reports indicate that the Rs 17,000-crore figure under investigation represents a cumulative assessment involving multiple transactions currently under the scanner.
In a parallel but related development, the Securities and Exchange Board of India (Sebi) has submitted the findings of its own probe to the ED, as well as to the National Financial Reporting Authority (NFRA) and the Insolvency and Bankruptcy Board of India (IBBI).Sebi’s investigation pertains to an alleged diversion of Rs 10,000 crore by Reliance Infrastructure (R Infra) through a series of transactions with an engineering firm named CLE Pvt Ltd.Sebi’s report alleged that R Infra transferred funds to CLE disguised as intercorporate deposits (ICDs) and other financial instruments such as investments and corporate guarantees. These transactions were allegedly conducted without the requisite shareholder or audit committee approvals, thereby violating disclosure norms and related-party transaction rules.
According to the report, CLE was not initially disclosed as a related party by R Infra, which Sebi claims allowed the company to bypass corporate governance protocols. SEBI noted that the funds were later routed to other entities within the Reliance Group.
Sebi’s investigation covers a period between FY13 and FY23, during which R Infra reportedly had annual financial dealings with CLE amounting to 25–90% of CLE’s total assets. As of March 31, 2022, total financial exposure by R Infra to CLE stood at Rs 8,302 crore.
Additionally, the regulator highlighted that between FY17 and FY21, R Infra wrote off Rs 10,110 crore under provisions such as fair value adjustments and impairment losses.
Despite these developments, the company allegedly continued to provide advances to CLE, even as it was aware of the firm’s inability to service the loans. Sebi’s report stated that R Infra made these advances in successive years, including after provisioning for doubtful debts.
According to Sebi, evidence collected during the investigation indicates that CLE was functionally a related party of R Infra. Documentation cited by the regulator included submissions by CLE to Yes Bank, where it acknowledged Reliance Infra as a promoter. Internal records, such as audit committee meeting minutes, reportedly identified CLE as a “group company.”
Additionally, the regulator found that bank accounts operated by CLE bore email addresses using the “@relianceada.com” domain, which corresponds to the Reliance ADA Group. Statements from key managerial personnel (KMPs) recorded during the probe, along with the fact that several directors and executives of the Reliance Group held positions in CLE, were also cited as supporting evidence.
A person close to the Reliance Group questioned the findings, according to ET reports, stating that Reliance Infrastructure had publicly disclosed the matter in February and that Sebi did not independently discover the issue. The person also said the company had an exposure of Rs 6,500 crore to CLE, and not Rs 10,000 crore as alleged.
“The allegation that the diverted amount is Rs 10,000 crore only serves to sensationalise the magnitude and is not based on facts,” the person said. It was further noted that the company had already initiated recovery proceedings through mandatory mediation and that a settlement had been reached to recover the entire Rs 6,500 crore exposure. The matter is currently pending before the Bombay High Court.
The distribution companies in Odisha, part of the recovery process, are operational, and the recovery of dues is underway. Further, the funds in question are apparently “fully recoverable.”
Sebi’s report stated that Anil Ambani, by virtue of his role as chairman of the Reliance Group (formerly known as the Reliance ADA Group), held over 40% shareholding in Reliance Infrastructure.
The report noted that Ambani had significant control and influence over R Infra until March 2019. He continued to serve as non-executive chairman and director of the company until March 25, 2022.
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