Reliance Power share price slumped over 5% on Thursday, 15 October, after the Enforcement Directorate (ED) seized Indian assets worth ₹2,032.81 crore belonging to the Anil Ambani-led group company as part of a Foreign Exchange Management Act (FEMA) investigation, according to a PTI report.
The seized assets include Reliance Power’s bank balances and its shareholding in Sasan Power Ltd, the ED said in a statement. The seizure order was issued on 12 October under Section 37A of FEMA.
Responding to the action, Reliance Power said in a regulatory filing that it disputes the allegations and will take all appropriate steps, as advised by its legal counsel, to protect its interests and those of its shareholders and other stakeholders, PTI reported.
According to PTI, the ED investigation stems from a Securities and Exchange Board of India (SEBI) action regarding write-offs or provisions of ₹2,101.46 crore recorded in Reliance Power's books. These related to overseas investments and advances made to companies in the British Virgin Islands (BVI) and the Cayman Islands.
The ED said the investigation traces back to 2006, when Reliance Natural Resources Ltd, which has since merged with Reliance Power, raised $300 million through foreign currency convertible bonds. Of this amount, $275 million was invested in its wholly owned Singapore subsidiary, Reliance Natural Resources (Singapore) Pte Ltd (RNRL-S).