ED cracks down on Reliance Power CFO in fake bank guarantee case
The Enforcement Directorate (ED) has arrested the CFO of debt-ridden industrialist Anil Ambani‘s Reliance Power in a money laundering case linked to the issuance of an alleged fake bank guarantee of Rs.68 crore, official sources said on Saturday. The CFO, Ashok Pal, was taken into custody on Friday night under the provisions of the Prevention of Money Laundering Act (PMLA) after the agency questioned him, they said. The CFO was charged with creating a fake guarantee from a foreign-based bank and fake communications from SBI.
He was produced before a magistrate on Saturday and sent to two days of ED custody. The agency will produce him before a special PMLA court on October 13 after the expiry of the remand period, said officials. The case pertains to a bank guarantee of Rs.68.2 crore submitted to the Solar Energy Corporation of India Limited (SECI) on behalf of Reliance NU BESS Limited, a subsidiary of Reliance Power, a listed company, which was found to be “fake”. The company was formerly known as Maharashtra Energy Generation Limited.
The accused company, which allegedly operated a racket for providing “fake” bank guarantees for business groups, was identified by the ED as Odisha-based Biswal Tradelink. As part of the investigation, the ED carried out searches against the company and its promoters in August and arrested its Managing Director, Partha Sarathi Biswal. The ED officials said Pal played a “crucial” role in the “diversion” of funds as he and some others were empowered by the company board to finalize, approve, and sign all documents for SECI’s BESS tender and use Reliance Power’s financial capability for the bid.
The probe found that the company submitted a bank guarantee from the FirstRand Bank located in Manila, Philippines, but the said bank does not have a branch in that country, said officials. The money laundering case stems from a November 2024 FIR of Delhi Police’s Economic Offences Wing (EOW). It was alleged that the company was engaged in issuing “fake” bank guarantees against a commission of 8 per cent.
The Reliance Group had then said 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, 2024. A group spokesperson said a criminal complaint was lodged by them against the third party (accused company) with Delhi Police’s EOW in October 2024, and the “due process” of law would follow.
The ED officials had said that the Bhubaneswar-based company was using an email domain — s-bi.Co.In — similar to sbi.Co.In, to create a “facade” of genuineness that the communication was being sent by the State Bank of India (SBI), the country’s largest lender. The fake domain was used to send “forged” communication to the SECI, they said. The sources alleged Pal “approved” releases and facilitated paperwork through internet-based communication platforms like Telegram and WhatsApp, and skipped the normal SAP /vendor master workflow. Biswal Tradelink, according to the ED, was a “mere paper entity” as its registered office was a residential property belonging to a relative of Biswal.
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Big nets, but small fish only gets caught !!! Strange