Anil Ambani’s Reliance Power CFO held in Rs 68-cr ‘false’ bank guarantee case

The chief financial officer (CFO) of industrialist Anil Ambani’s Reliance Power has been arrested by the Enforcement Directorate (ED) in connection with a money-laundering case related to the issuance of a purported fraudulent bank guarantee amounting to Rs 68 crore, official sources revealed on Saturday (October 11).

Ashok Pal, the arrested official, was taken into custody on Friday (October 10) night under the Prevention of Money Laundering Act (PMLA) following an interrogation by the agency, the official sources added.

Pal sent to two-day ED custody

On Saturday, he was produced before a magistrate and sent to two days of ED custody. Pal will be taken to a special PMLA court on Monday (October 13) once the remand period expires, sources added.

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The matter concerns a bank guarantee amounting to Rs 68.2 crore that was submitted to the Solar Energy Corporation of India Limited (SECI) on behalf of Reliance NU BESS Limited (earlier known as Maharashtra Energy Generation Limited), a subsidiary of Ambani’s listed Reliance Power, which was discovered to be “fake”.

Odisha-based firm involved

An Odisha-based company was allegedly used for producing the fake papers. The ED identified the company, which allegedly ran a racket for issuing fake bank guarantees for business bodies, as Odisha-based Biswal Tradelink.

According to a CNBC-TV18 report, investigations claimed that the arrested official played a key role in picking Biswal Tradelink to provide the false bank guarantee. The report added that the entity lacked a credible background or track record in dealing with such types of financial instruments.

Meanwhile, ED conducted search operations in August against the company and those who promoted it, and held Partha Sarathi Biswal, Biswal Tradelink's managing director.

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Sources in the ED also said Pal played a key role in diversifying funds as he and some others were empowered by the company board to take important calls, including finalising, approving and signing all documents, for the SECI’s BESS tender and use Reliance Power’s financial capability for the bid.

While the probe found that the company gave a bank guarantee from the FirstRand Bank located in Manila in the Philippines, the said bank does not have a branch in the Southeast Asian nation, the sources added.

Case stems from November 2024 FIR

The money-laundering case originates from an FIR of Delhi Police's Economic Offences Wing (EOW) in November last year. It was alleged that the company was engaged in issuing “fake” bank guarantees against a commission of eight per cent.

The Reliance Group had said then that Reliance Power had been a “victim of fraud, forgery and cheating conspiracy” in this case, and it had made due disclosures in this context to the stock exchange on November 7 last year.

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According to a group spokesperson, a criminal complaint was lodged by them against a third party (accused firm) with Delhi Police’s EOW in October last year, and that law would follow its “due process”.

According to reports, the Odisha-based company only appears to be a paper entity with its registered office located at a residential property belonging to one of Biswal's kin. No formal company records were discovered at the address, while suspicious financial flows and shell accounts were detected.

Fake email domain used

Sources in the ED said the Odisha-based firm was using an email domain — s-bi.co.in — similar to sbi.co.in to create a “façade” of genuineness that the communication was being made by the country’s biggest lender – the State Bank of India.

Also read: ED raids Odisha firm against 'fake' bank-guarantee racket

The fake domain was used to send "forged" communication to the SECI, they added.

The agency’s sources also alleged Pal “approved” releases and facilitated paperwork through internet-based communication platforms such as Telegram and WhatsApp, and bypassed the normal SAP/vendor master workflow.

(With agency inputs)