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The Enforcement Directorate (ED) on Wednesday said it has seized assets worth Rs 2,032.81 crores in India belonging to Reliance Power Ltd (RPL) in connection with its ongoing investigation under the Foreign Exchange Management Act (FEMA).
These assets were seized under Section 37A of the Foreign Exchange Management Act (FEMA), 1999. ED said the seized assets include bank balances of RPL and its shareholding of Sasan Power Limited, and that the assets are equivalent in value to the foreign exchange held outside India in contravention of Section 4 of FEMA. The agency said its investigation was initiated on the basis of information received from the Securities and Exchange Board of India (SEBI), pertaining to write-offs and provisions aggregating Rs 2,101.46 crore made by RPL in its books of account. "These write-offs were related to overseas investments and advances made to companies in the British Virgin Islands (BVI) and the Cayman Islands," ED said in a statement. The federal agency had also conducted searches under FEMA from March 6 to March 8 this year, wherein several pieces of incriminating evidence were seized, and statements of several persons were recorded. "Investigation has revealed that Reliance Natural Resources Ltd (since merged with RPL) raised US 275 million, which was invested in its wholly owned Singapore subsidiary, Reliance Natural Resources (Singapore) Pte Ltd (RNRL-S)," it said, adding, "RNRL-S placed these funds on deposit with Deutsche Bank (Suisse) SA, Geneva." ED said the deposits were used as collateral for loans extended to entities incorporated in the British Virgin Islands. "The investigation found that these BVI entities were controlled and managed from India by the Reliance Anil Ambani Group (RAAG) through front persons, who acted as per the Groups directions." ED's further investigation has revealed that the loan proceeds were utilised for varied purposes, including temporary roundtripping of funds to India through foreign entities based in Mauritius. "The funds were utilised for the benefit of the Reliance Anil Ambani Group and parked outside India," said the ED. The agency also mentioned that the BVI entities failed to repay the loans extended by Deutsche Bank. "As part of the cover-up, documents were fabricated to show that RNRL-S and Indonesian subsidiaries of RPL had made advances to these BVI entities for apparent genuine business purposes." During the investigation, the federal agency mentioned that the documentation was backdated and prepared in order to project these transactions as genuine business transactions. (ANI)
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