ED seizes assets worth over Rs 2,000 crore of Reliance Power

The ED says it seized Indian assets belonging to Reliance Power Ltd, or RPL, worth ₹2,032.81 crore. The action was taken under the Foreign Exchange Management Act, known as FEMA. The agency links the seizure to alleged foreign exchange held outside India in violation of the law.

The seized assets include RPL’s bank balances and its shareholding in Sasan Power Limited. RPL said those Sasan shares had already been pledged to Power Finance Corporation, a government undertaking, for more than 10 years. The company also said the matter relates to transactions from 2006 and 2008.

The ED’s investigation followed findings by Sebi about ₹2,101.46 crore in write-offs and provisions. It alleges the underlying overseas investments and advances involved entities in the British Virgin Islands and Cayman Islands. The investigation remains in progress, so the allegations have not reached a stated final conclusion in the article.

FEMA is India’s legal framework for regulating foreign exchange, overseas assets, and cross-border payments. The article does not define the law itself. In general, it is used to ensure that foreign-currency transactions and assets held outside India follow Indian permissions, reporting, and exchange-control requirements.

That matters here because the ED says RPL-related funds were held overseas through a Singapore subsidiary and deposits in Geneva. It alleges those deposits supported loans to companies in the British Virgin Islands. The agency described the Indian assets as equivalent to foreign exchange held outside India in contravention of FEMA.

FEMA can therefore connect overseas conduct with assets located in India. In this case, the ED seized Indian bank balances and RPL’s Sasan Power shareholding. The action is an alleged regulatory response, not a final finding of guilt. The article says the investigation is still continuing.

The ED said it seized Indian assets worth ₹2,032.81 crore belonging to Reliance Power Ltd. The amount was presented as equivalent to foreign exchange allegedly held outside India in violation of FEMA. This gives the action both a large financial scale and a cross-border focus.

The assets were not limited to one account. They included RPL’s bank balances and its shareholding in Sasan Power Limited. RPL said the Sasan shares were already pledged to Power Finance Corporation Ltd, a government undertaking, under security arrangements lasting more than 10 years. It also mentioned certain company bank balances.

The seizure followed an ED investigation into Sebi findings concerning ₹2,101.46 crore in write-offs and provisions. The ED linked those accounting entries to overseas investments and advances involving BVI and Cayman Islands companies. The article also notes that the wider group has faced other asset attachments in money-laundering cases.

The ED alleges that Reliance Natural Resources Ltd raised $300 million through foreign currency convertible bonds in 2006. Of that amount, $275 million was invested in its wholly owned Singapore subsidiary, Reliance Natural Resources (Singapore) Pte Ltd, or RNRL-S. Reliance Natural Resources later merged with RPL.

According to the agency, RNRL-S placed the $275 million with Deutsche Bank (Suisse) SA in Geneva. The deposits were then used as collateral for loans extended to companies incorporated in the British Virgin Islands. The ED says those companies were controlled and managed from India by the Reliance Anil Ambani Group through front persons.

The agency further alleges that the loan proceeds served several purposes, including temporarily routing money back to India through Mauritius-based foreign entities. It also says later documents were backdated to make the transactions appear to be genuine business advances. Further investigation is in progress.

The alleged mechanism began with deposits placed by RNRL-S at Deutsche Bank (Suisse) SA in Geneva. The ED says those deposits acted as collateral for loans to companies incorporated in the British Virgin Islands. Although the companies were formally offshore entities, the agency alleges they were controlled and managed from India through front persons.

The ED says the BVI loan proceeds were used for varied purposes, including temporary round-tripping to India through entities based in Mauritius. Round-tripping means money leaves a country and later returns through foreign entities. The agency alleges this movement was intended to benefit the Reliance Anil Ambani Group.

The BVI companies allegedly failed to repay Deutsche Bank. The ED says documents were then fabricated and backdated to portray advances from RNRL-S and Indonesian subsidiaries as genuine business transactions. These are investigative allegations. The article says the ED conducted searches in March and that further investigation continues.

Timing matters because the alleged financial steps began around 2006 and 2008, but the ED’s seizure occurred many years later. RPL described the bonds as issued 20 years ago and the related overseas investment as made 18 years ago. It also said the investment in Singapore had received applicable approvals.

The long interval creates a dispute over how old transactions should be understood today. RPL pointed to the Sasan Power shares being pledged to Power Finance Corporation for more than 10 years. The ED, however, says its investigation found backdated documents and a structure involving overseas entities and funds returning through Mauritius.

The article does not state a final ruling on those competing accounts. It says the ED conducted related searches in March, seized evidence, and recorded statements from several people. The investigation remains in progress, so the eventual legal and financial consequences are not yet given.

A tax haven generally refers to a jurisdiction known for low taxes, financial confidentiality, or structures that can attract overseas money. An offshore subsidiary is a company incorporated outside the parent company’s home country. These arrangements can have legitimate business uses, but regulators examine them closely when ownership, control, or money flows are unclear.

Financial round-tripping describes funds leaving a country and later returning through foreign entities. In this case, the ED alleges that loan proceeds from BVI companies were temporarily routed back to India through entities based in Mauritius. It also alleges that the BVI companies were managed from India through front persons.

Regulators may scrutinize such structures because they can make transactions harder to trace and may disguise who controls funds or why money moved. The ED alleges that backdated documents were created to present some advances as genuine business transactions. The article does not establish that every offshore structure is improper.