Reliance Power, Reliance Infra move to calm markets after ED attaches Rs 7,500 crore in assets

Reliance Power Ltd and Reliance Infrastructure Ltd, owned by Anil Ambani, have issued official statements denying any disruption in operations following the Enforcement Directorate’s (ED) provisional seizure of certain assets under the Prevention of Money Laundering Act (PMLA). The companies moved quickly to allay concerns among employees, shareholders and the broader market by assuring that business activities would continue as usual despite the ongoing investigation and seizure of assets estimated to be worth more than Rs 7,500 crore.

In a recent filing with the stock exchanges, Reliance Power addressed the asset facility, stating that the company is actively contesting the matter through appropriate legal channels. “Reliance Power said that some of the company’s assets have been temporarily attached by the CEO. However, it stressed that the matter is subject to judicial review and is subject to appeal before appropriate legal forums. The company also confirmed that its business operations have not been affected and it continues to fulfill all obligations in the normal course,” the company stated.

Reliance Infrastructure Ltd also made a clear distinction between the ongoing proceedings and its current management, emphasizing that Anil D. Ambani has not held a position on the board for more than three-and-a-half years. “Reliance Infrastructure Ltd has clarified that the CEO has attached certain assets alleging violations under the PMLA, but stressed that this has no impact on its business or interests of stakeholders. The company also noted that Anil D. Ambani has not been on the board of Reliance Infrastructure for more than three-and-a-half years, keeping its current management out of the ongoing proceedings,” the company said in its statement.

The two companies affirmed their commitment to legal compliance and transparency, stressing their full compliance with all applicable laws and cooperation with the authorities. The statements appear aimed at reassuring investors in the wake of heightened scrutiny linking the companies to a wider investigation involving entities of Anil Ambani’s group.

According to reports, the latest action taken by the executive includes annexation of around 132 acres of land within the Dhirubhai Ambani Knowledge City (DAKC) park in Navi Mumbai, worth around Rs 4,462 crore. This step comes as part of an ongoing investigation into alleged financial irregularities and money laundering.

The enforcement agency’s broader investigation is focusing on bank fraud cases involving Reliance Communications Limited, Reliance Communications Finance Limited and Reliance Home Finance Limited. Before this, the agency had attached 42 properties, worth an estimated Rs 3,083 crore, in connection with the same case – taking the total value of associated assets to around Rs 7,500 crore.

The main focus of the investigation is on the alleged diversion and laundering of public funds raised by Reliance Home Finance Ltd (RHFL) and Reliance Commercial Finance Ltd (RCFL). Yes Bank invested Rs 2,965 crore in RHFL and Rs 2,045 crore in RCFL between 2017 and 2019. By December 2019, Rs 1,353.50 crore for RHFL and Rs 1,984 crore for RCFL remained unpaid as these investments became non-operational.

The CEO reportedly found that direct investments by the erstwhile Reliance Nippon Mutual Fund in Anil Ambani group’s finance companies were impermissible under SEBI’s conflict of interest rules. The agency alleges that money from the public, channeled through the mutual fund, was indirectly channeled through Yes Bank investments, which eventually reached entities linked to the Anil Ambani group.