Enforcement Directorate investigates alleged Rs 3,000 crore loan diversion involving Reliance Power CFO.
The Enforcement Directorate (ED) has taken significant action in a money-laundering investigation, arresting Ashok Kumar Pal, the chief financial officer of Reliance Power. This arrest is connected to an alleged fraud involving bank loans totaling Rs 3,000 crore that were reportedly diverted illegally from the conglomerate’s firms. Reports indicate that Pal was summoned to the ED’s headquarters in Delhi, where he was arrested on Friday.
According to an unnamed official, the agency found sufficient grounds to proceed with Pal’s arrest, which has now led to his remand for two days in ED custody, as confirmed by a Delhi court on Saturday. Pal is recognized as a close associate of industrialist Anil Ambani, further emphasizing the high-profile nature of this case.
The ED’s investigation focuses on loans disbursed by Yes Bank to several companies under the Reliance Anil Dhirubhai Ambani Group between 2017 and 2019. Allegations have surfaced that these funds were diverted unlawfully. Furthermore, the agency is probing potential quid pro quo arrangements, investigating whether bribes were paid to officials at Yes Bank, including its promoters.
In its inquiry, the ED has alleged that Pal played a pivotal role in the submission of a fraudulent bank guarantee exceeding Rs 68 crore to the Solar Energy Corporation of India. Additionally, he is accused of diverting funds through fake invoices and orchestrating a fraudulent bank guarantee operation that utilized spoofed email domains. These domains mimicked those of major banks like the State Bank of India, Punjab National Bank, and Union Bank of India, making forged financial instruments appear legitimate.
The ED’s investigation is rooted in two first information reports (FIRs) filed by the Central Bureau of Investigation (CBI) in September 2022. These FIRs pertain to two separate loans provided by Yes Bank to Reliance Home Finance Limited and Reliance Commercial Finance Limited, both of which are entities connected to the broader Ambani Group.
In July, as part of the ongoing investigation, the ED conducted raids at over 35 locations and examined the operations of 50 companies and 25 individuals associated with the case. Following media coverage of these developments, both Reliance Power Limited and Reliance Infrastructure Limited issued statements asserting that the actions taken by the central agency would have no effect on their business operations, financial performance, shareholders, or employees.
They clarified that the allegations are likely linked to the transactions of Reliance Communications Limited or Reliance Home Finance Limited, with which they claim to have no business or financial connections. Furthermore, they emphasized that Anil Ambani is not a member of their board, indicating that any actions related to RCOM or RHFL would not impact the governance, management, or operations of Reliance Power or Reliance Infrastructure.
