No impact of ED raids on Infra, Power ventures: Anil Ambani’s Reliance Group

Anil Ambani's Reliance Group has issued an official clarification regarding the recent action by the Enforcement Directorate (ED). The group said that the ED’s actions would have no impact on the business operations, financial performance, shareholders, employees, or any other stakeholders of its listed entities— Reliance Infrastructure and Reliance Power .

In separate exchange filings on Thursday, Reliance Infrastructure and Reliance Power said, “…wishes to clarify regarding the media reports regarding the recent action by the enforcement agency. The said actions have absolutely no impact on the business operations, financial performance, shareholders, employees, or any other stakeholders.”

As per the release, the media reports appear to pertain to allegations concerning transactions of Reliance Communications Limited (RCOM) or Reliance Home Finance Limited (RHFL) which are over 10 years old. 

The group clarified that Reliance Power and Reliance Infrastructure are separate and independent listed entities with no business or financial linkage to RCOM or RHFL.

The release further stated that RCOM has been undergoing corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016, for over six years. RHFL has been fully resolved pursuant to the judgment of the Supreme Court of India.

“Similar allegations as those set out in the media reports are sub-judice and pending before the Hon’ble Securities Appellate Tribunal, as per publicly available information,” the release noted.

As per the statement, Anil D. Ambani is not a member of the board of Reliance Infrastructure and Reliance Power. Therefore, any action taken against RCOM or RHFL has no bearing or impact on the governance, management, or operations of both the listed group entities.

Notably, Anil Ambani stepped down as director of Reliance Power and Reliance Infrastructure in March 2022, following the Securities and Exchange Board of India's (Sebi) order restraining him from trading in securities or being associated with any listed companies.

Reliance Power and Reliance Infrastructure will continue to focus on their business plans and remains committed to creating value for all stakeholders, it added.

Reliance Group issued the statement after the ED on Thursday conducted simultaneous raids on Anil Ambani group companies in connection with a money laundering probe related to an alleged ₹3,000-crore loan fraud. More than 35 premises in Mumbai and Delhi of 50 companies were searched under the Prevention of Money Laundering Act (PMLA), according to reports.

According to media reports, preliminary investigations show that loans worth around ₹3,000 crore, sanctioned by YES Bank between 2017 and 2019, were allegedly diverted to shell firms and other group entities. Reliance Group in its statement to the media denied the allegation by stating: “Loans extended by Reliance Home Finance Limited (RHFL) to certain private companies of the promoter of YES Bank were sanctioned on merit, after following the due process, and were duly approved by a credit committee comprising more than 30 individuals. These loans were fully secured and have been fully repaid, including interest and the outstanding is zero.”

The raids come days after State Bank of India classified Reliance Communications, along with promoter director Anil Ambani, as 'fraud'. SBI, too, is in the process of lodging a complaint with the Central Bureau of Investigation (CBI).

With regard to SBI’s action, the statement from Reliance Group pointed out that RCOM has been under the Corporate Insolvency Resolution Process (CIRP) pursuant to the Insolvency and Bankruptcy Code, 2016, for over six years. And the matters pertaining to the resolution of RCOM are sub-judice in the NCLT and Hon’ble Supreme Court of India.

“State Bank of India (SBI) did not grant Mr. Anil D. Ambani an opportunity for a personal hearing before its committee made its decision in the matter. Furthermore, SBI had dropped similar allegations against other noticees on identical grounds; however, Mr. Ambani was not afforded the same treatment. This failure on the part of SBI amounts to a serious breach of the principles of natural justice and runs contrary to established judgments of the Hon’ble Supreme Court and the Hon’ble Bombay High Court,” read the statement.

The group went on to mention that it “is important to note that Mr. Anil D. Ambani served as a non-executive director on the board of RCOM and was not involved in its day-to-day operations, which were managed by the company’s key managerial personnel. Additionally, SBI did not provide Mr. Ambani with the underlying documents forming the basis of the Forensic Audit Report (FAR), thereby depriving him of a fair opportunity to assess and respond to the allegations.”

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