Reliance Power Under the Enforcement Directorate’s Scanner: ₹2,032.81 Crore Seizure Raises Explosive Questions About Two Decades of Offshore Transactions

A Twenty-Year Financial Trail: From Convertible Bonds to Offshore Collateral

The ED’s account begins in 2006, when Reliance Natural Resources Limited (RNRL), subsequently merged with Reliance Power, raised US$300 million through Foreign Currency Convertible Bonds (FCCBs). According to the agency, US$275 million was transferred into its wholly owned Singapore subsidiary, Reliance Natural Resources (Singapore) Pte Ltd.

That subsidiary placed the funds on deposit with Deutsche Bank (Suisse) SA in Geneva. The ED alleges that these deposits were then used as collateral for loans granted to entities incorporated in the British Virgin Islands.

The critical allegation concerns the relationship between these foreign entities and the Indian group. According to the ED, they were controlled and managed from India through front persons acting on the group’s directions.

The agency further alleges that the resulting loan proceeds were put to varied uses, including temporary round-tripping of funds into India through foreign entities based in Mauritius. It says funds were used for the group’s benefit and also remained parked outside India.

Finally, the ED says that the BVI entities failed to repay the loans extended by Deutsche Bank. Documents subsequently purporting to establish that the Singapore subsidiary and Indonesian subsidiaries of Reliance Power had made genuine business advances to these borrowers were allegedly fabricated and backdated.

If these allegations are established, the questions would reach well beyond an ordinary overseas investment that failed to deliver returns. They would concern who controlled the borrowers, who benefited from the loan proceeds, why the original financing structure failed, and whether subsequent documentation accurately represented the transactions.

An investment loss and a deliberately concealed transfer of funds are two very different things. A business may legitimately invest overseas, extend credit, pledge deposits and incur losses. The investigative issue is whether the transactions occurred for the reasons disclosed in the company’s records, whether the applicable regulatory requirements were met, and whether the documentation faithfully recorded what happened.

The ED’s allegations make these questions central. But a public press release is not a substitute for the underlying bank records, transaction schedules, forensic findings and evidence that would eventually have to withstand legal scrutiny.

The ₹2,032.81-Crore Seizure: What Exactly Has Been Taken?

The ED announced that assets worth ₹2,032.81 crore belonging to Reliance Power had been seized under Section 37A of the Foreign Exchange Management Act, 1999.

The reported components are:

• ₹2,026.65 crore: Reliance Power’s shareholding in Sasan Power Limited.
• ₹6.16 crore: Bank balances.

Together, these amount to ₹2,032.81 crore.

The agency says the assets are equivalent in value to foreign exchange allegedly held outside India in contravention of Section 4 of FEMA. The action is directed at assets in India corresponding to the value involved in the alleged contravention abroad.

There is, however, an important legal and financial distinction. The company has described the seizure as provisional and subject to confirmation by the competent authority. It has disputed the allegations and stated that no penalty was imposed as part of the seizure order. The action must not be presented as a final finding of criminal guilt.

The seizure nevertheless raises a serious question about the underlying transaction chain: how did an overseas investment and financing arrangement originating nearly two decades ago lead to an enforcement action against assets held in India today?

The ED’s press release establishes the agency’s stated theory. It does not provide a transaction-by-transaction ledger enabling an independent reader to reconstruct every stage of the alleged movement of money.

The public therefore needs more than a headline figure. It needs clarity about the entities involved, the amounts transferred, the dates of the loans, the collateral arrangements, the ultimate recipients and the basis on which the Indian assets have been valued.

₹2,101.46 Crore in Write-Offs: The Accounting Question That Started the Investigation

The ED says its investigation began after it received information from the Securities and Exchange Board of India (SEBI) concerning ₹2,101.46 crore in write-offs and provisions recorded in Reliance Power’s books. These related to overseas investments and advances involving companies in the British Virgin Islands and the Cayman Islands.

There is a substantial difference between an investment that becomes commercially unsuccessful and a transaction whose underlying purpose or documentation is allegedly misrepresented.

A write-off can be a legitimate accounting response to an irrecoverable asset. It does not, by itself, prove fraud. Equally, describing an amount as an overseas investment or an advance does not settle whether the transaction was properly authorised, disclosed, documented or undertaken for a genuine commercial purpose.

The central questions are therefore unavoidable.

What were the overseas assets and advances that ultimately resulted in write-offs or provisions of ₹2,101.46 crore? When were the original advances made? What recovery measures were taken after the loans became unrecoverable? Who approved the transactions? What did internal auditors, statutory auditors and the company’s board know at the relevant time?

And if the ED’s allegation about fabricated and backdated documents is correct, when were those documents prepared, by whom, and for what purpose?

These are not peripheral accounting details. They go to the heart of whether the financial statements faithfully represented the transactions and whether the people responsible for approving and recording them discharged their duties.

The numerical comparison also deserves clarification. The write-offs and provisions cited by the ED total ₹2,101.46 crore, whereas the assets seized are valued at ₹2,032.81 crore. The difference is ₹68.65 crore.

That arithmetic does not establish an inconsistency or wrongdoing. The two figures describe different things: accounting write-offs and provisions on the one hand, and assets seized as equivalent value on the other. The ED’s release does not provide a detailed reconciliation between them. Publishing the valuation methodology and a clear explanation of how the figures relate would help prevent speculation and strengthen public confidence in the investigation.

An investigation of this scale should leave as little room as possible for ambiguity.

The Offshore Structure: What Investigators Must Establish

The jurisdictions named in the ED’s release—Singapore, Switzerland, the British Virgin Islands, the Cayman Islands and Mauritius—play different roles in the agency’s description of the transactions.

Singapore was the location of RNRL’s wholly owned subsidiary. Geneva was the location of the bank where the funds were deposited. The BVI entities allegedly borrowed against those deposits, while foreign entities based in Mauritius are said to have been involved in temporary round-tripping into India.

The ED’s allegations concern the use and control of these arrangements, not simply the fact that the entities were incorporated abroad.

An offshore company is not inherently unlawful. Nor does a foreign investment become fraudulent merely because the investment is routed through another jurisdiction. The decisive questions concern the purpose of the structure, the identity of the beneficial owners, the actual movement of funds, compliance with applicable foreign-exchange requirements and the accuracy of the representations made to banks and regulators.

Accordingly, investigators should establish:

First, the beneficial ownership and control of the borrowers. Who ultimately controlled the BVI entities? Who appointed their directors, operated their accounts and instructed them to borrow? Did the alleged front persons exercise independent authority or act under directions from elsewhere?

Second, the collateral and lending trail. Which deposits were pledged, under what agreements, for what amounts and on whose instructions? What did Deutsche Bank’s records show about the borrowers, loan disbursements, repayments, defaults and recovery efforts?

Third, the end use of the money. The ED refers to varied uses, temporary round-tripping and benefits to the group. Investigators should trace the funds to their final recipients and distinguish money that temporarily passed through India from money that ultimately remained abroad.

Fourth, the documentary chronology. If advances were represented as genuine business transactions after the borrowers had failed to repay loans, investigators should establish when the documents were prepared, who approved them, whether their metadata or other records support the allegation of backdating, and what the relevant individuals knew.

Fifth, the regulatory approvals and disclosures. The original FCCB fundraising, investments in the Singapore subsidiary and subsequent overseas transactions must be examined against the approvals actually obtained, the disclosures made and the regulations applicable at the time.

The investigation should follow the evidence in both directions. Records that support the ED’s case should be pursued, but records that substantiate the company’s defence must also be considered. A credible inquiry is not one that merely confirms an initial theory; it is one that tests that theory against the complete documentary and financial record.

Reliance Power’s Defence Must Also Be Examined

Reliance Power has disputed the ED’s allegations. In its regulatory disclosure concerning the recent seizure, the company stated that the action relates to FCCBs issued in 2006 and overseas investments made in 2008 in a Singapore subsidiary, which it says were undertaken with all applicable approvals.

The company has also said that the Sasan Power shares covered by the order have been pledged in favour of the state-run Power Finance Corporation under security arrangements in place for more than ten years.

These statements matter. They present the company’s position on the original transactions, the regulatory approvals and the assets affected by the seizure.

But a denial is not a substitute for documentary verification, just as an enforcement allegation is not a conviction.

The proper test is whether the company can substantiate its position through the contemporaneous approvals, bank records, board resolutions, investment agreements, loan documents and accounting records. The ED, in turn, must demonstrate how the evidence it has gathered supports the alleged FEMA contravention and the decision to seize the equivalent value of Indian assets.

The fact that transactions date back to 2006 and 2008 makes this more difficult, but it also makes a rigorous documentary reconstruction more important. Where a financial trail extends across nearly twenty years and multiple jurisdictions, investigators should make explicit which evidence is contemporaneous, which conclusions are based on reconstructed records, and how competing explanations have been evaluated.

That is the standard the public should expect.

A Separate Reliance Power Controversy: The SECI Bank Guarantee Case

The current FEMA matter should not be confused with another enforcement case involving Reliance Power and an alleged bank guarantee fraud connected with a tender issued by the Solar Energy Corporation of India (SECI).

This separate case is relevant to questions of corporate controls and governance, but its allegations must remain distinct from those in the offshore-transactions investigation.

The ED’s public account of the bank guarantee case concerns a tender for standalone battery energy storage projects with a stated capacity of 1,000 MW/2,000 MWh. The tender required a bank guarantee of ₹68.20 crore.

According to an ED press release dated 6 December 2025, the agency filed a supplementary prosecution complaint against Reliance Power, its subsidiary Reliance NU BESS Limited, Rosa Power Supply Company Limited, former Reliance Power chief financial officer Ashok Kumar Pal and other individuals and entities.

The ED alleged that fake bank guarantees and forged endorsements were used in connection with the tender. It described the use of a look-alike SBI-related domain, s-bi.co.in, and alleged that funds were routed from Rosa Power to Biswal Tradelink Private Limited under the guise of transportation services. The agency stated that ₹6.33 crore had been routed to the intermediary and that Reliance Power had also paid it ₹5.40 crore in fees.

The ED further alleged that false work orders and invoices were used to make the arrangements appear to be genuine commercial transactions.

These are serious allegations, but the procedural distinction is essential: a prosecution complaint is an allegation placed before the court, not a judicial finding that every person or company named in it is guilty.

The company’s position must also be acknowledged. Court reporting on the proceedings records the defence contention that Reliance Power had engaged the intermediary to arrange the bank guarantee, that the company had no knowledge that the documents were forged, and that it provided a replacement guarantee from IDBI Bank after the alleged problem came to light. Reliance NU BESS had also lodged a complaint against the intermediary.

In June 2026, the Delhi High Court refused bail to Ashok Kumar Pal in the money-laundering case. That decision was made at the bail stage; it was not a conviction after trial.

The important governance question is whether the tender documentation, intermediary selection, payments, verification procedures and internal controls were adequate. The criminal question is whether the evidence establishes the culpability of the particular individuals and entities accused.

Those questions must be answered through the judicial process, not by treating the ED’s account as an automatic verdict.

Nevertheless, the existence of a separate high-value enforcement case involving alleged forged financial documents makes rigorous scrutiny of corporate controls all the more important. Shareholders and public institutions should not have to rely on assurances alone where the relevant documentary evidence can be independently tested.

The Wider Reliance Anil Ambani Group Investigations

The new FEMA action also comes against the background of several other investigations involving companies associated with the Reliance Anil Ambani Group. These must not be combined into a single proven fraud, but they are relevant to understanding why investigators, lenders, shareholders and the public are demanding more detailed answers.

1. Reliance Communications and the SBI bank-fraud investigation

In April 2026, the Central Bureau of Investigation (CBI) announced the arrests of two senior Reliance Communications executives, D. Vishwanath and Anil Kalya, in a case registered on a complaint by State Bank of India.

According to the CBI, SBI alleged a wrongful loss of approximately ₹2,929.05 crore. The complaint also referred to alleged losses of ₹19,694.33 crore across 17 public-sector banks and financial institutions.

The CBI alleged that Reliance Communications had used circuitous transactions through entities controlled by company officials and discounted letters of credit for purported service-related transactions with group entities. It said the investigation was continuing.

These allegations concern Reliance Communications and the banking transactions under investigation. They do not, by themselves, prove the allegations in the current Reliance Power FEMA matter.

2. The separate Bank of Baroda case

In February 2026, the CBI registered another case involving Reliance Communications and Anil Ambani, following a complaint by Bank of Baroda.

According to the CBI, the complaint alleged a loss exceeding ₹2,220 crore arising from loans allegedly diverted or misused through fictitious related-party transactions and accompanied by manipulation of accounting records. The agency also conducted searches at Anil Ambani’s residence and Reliance Communications’ registered offices.

This was a separate loan account and investigation, not simply another figure from the SBI consortium case.

The public interest lies in understanding the individual transactions and their legal outcomes—not in adding numbers from different complaints and treating the sum as a finding of guilt.

3. The Reliance Commercial Finance investigation

A further development came in July 2026, when the CBI filed its first chargesheet in a case concerning Reliance Commercial Finance Limited.

The filing named seven accused, including Reliance Infrastructure Limited, Reliance Home Finance Limited and five former senior Reliance Commercial Finance officials. The CBI alleged that funds obtained by Reliance Commercial Finance had been routed to group companies through intermediary entities in violation of loan conditions.

The agency estimated the alleged loss to 13 public-sector banks at approximately ₹4,097 crore and said further investigation was continuing.

A chargesheet is a significant procedural step because it places the agency’s case before the court. It is not equivalent to a conviction, and the allegations against each accused must be assessed separately.

4. The SEBI proceedings concerning Reliance Home Finance

In August 2024, SEBI issued a final order in a separate matter concerning Reliance Home Finance Limited and 27 other parties, including Anil Ambani.

The order restrained Ambani from accessing the securities market for five years and imposed a penalty of ₹25 crore. The case concerned alleged diversion of funds through loans and related entities.

This is a securities-regulatory matter involving Reliance Home Finance, not the current FEMA seizure against Reliance Power. Reliance Power itself publicly stated that it was not a noticee or party to those proceedings and that no directions in that order had been issued against it. Company disclosures have also recorded that an appeal was filed before the Securities Appellate Tribunal.

The distinction matters. It would be inaccurate to use the SEBI order as proof of liability in the new FEMA case. But the regulatory proceedings remain part of the broader public record relevant to governance and regulatory scrutiny within the group.

5. The Reliance Infrastructure transactions reviewed by SEBI

In June 2026, Reuters reported that SEBI had rejected settlement applications by Anil Ambani and Reliance Infrastructure concerning separate allegations about the routing of company funds to entities associated with the controlling shareholder.

According to the report, SEBI alleged that ₹6,526 crore had been improperly routed to related entities and that a company described as independent had, in substance, functioned as a group-linked entity. The report said the wider transactions involved substantially larger sums over a period extending through 2024.

The Reliance Anil Ambani Group categorically denied the allegations and said the matters were sub judice.

Again, this is not proof of the allegations in the Reliance Power FEMA case. It is, however, another example of why related-party transactions, beneficial ownership, independent oversight and the end use of corporate funds warrant close scrutiny.

The Supreme Court Has Already Called for Time-Bound Investigations

The need for urgency is not merely an editorial demand.

In proceedings concerning investigations into the Reliance Anil Ambani Group, the Supreme Court examined status reports filed by the ED and CBI. A court record dated 23 March 2026 stated that the ED had constituted a Special Investigation Team on 12 February 2026 and reported investigations or inquiries in eight cases. The CBI’s status report identified seven cases under active investigation.

The same court record referred to allegations concerning a purported arrangement known as “Project Help”, in which insolvency proceedings were allegedly initiated through unrelated lenders. It recorded claims of approximately ₹2,983 crore being settled for ₹26 crore in the described transactions. These remain matters requiring proof and a clear account of the underlying transactions.

The court expressly refrained from expressing an opinion on the merits of the allegations. It nevertheless emphasised the need for the ED and CBI to conduct their investigations in a dispassionate, fair, transparent and independent manner and to take them to their logical conclusion within a time-bound framework.

The Solicitor General assured the court that efforts would be made to complete the investigations within four weeks. The court also directed concerned agencies and institutions to provide information requested by the ED in a timely manner and said the agency should report reluctance, resistance or delay to the court.

This is a crucial part of the public record. It shows that the demand for effective investigation is not a call to presume guilt. It is a call to ensure that the available evidence is assembled, tested and acted upon without avoidable delay.

There is also an important disclosure issue. The March court record referred to aggregate claims of approximately ₹73,006 crore in connection with the CBI’s seven cases. A separate CBI public release in May 2026 described the total alleged loss across seven cases as ₹27,337 crore. These figures may reflect different scopes or reporting bases, and they should not be treated as directly comparable without clarification. The agencies should publish an updated, case-by-case reconciliation so that the public can understand what each figure represents.

When investigations involve numerous companies, lenders, transactions and overlapping allegations, opaque aggregate figures can obscure more than they explain. Clear accounting of case status, alleged loss, recovery, seizure, attachment and amounts under dispute would be a practical step towards transparency.

The Questions That Must Now Be Answered

The current investigation requires precise, evidence-based answers.

Who controlled the overseas borrowers? The ED alleges that BVI entities were managed from India through front persons. Their beneficial ownership, decision-making records, bank mandates and communications should be examined and presented in a manner that can be tested in legal proceedings.

What happened to the US$275 million transferred to the Singapore subsidiary? The ED describes the deposits, collateral and alleged loan structure. A detailed transaction schedule should establish the amounts involved, disbursement dates, repayment history, defaults and ultimate use of the proceeds.

What became of the alleged round-tripped funds? The agency says some money was temporarily brought into India through Mauritius-linked entities. Investigators should establish the relevant amounts, recipients and onward transfers, distinguishing verified transactions from inferences.

Who prepared or approved the disputed documents? If the documents were fabricated and backdated, the inquiry must identify the people involved, establish their knowledge and examine whether the documents were used to mislead banks, auditors, regulators or investors.

What did the company’s governance systems detect? Board approvals, internal-control reports, statutory audit records, related-party disclosures and communications among relevant officers should be reviewed. Any finding of responsibility must be tied to specific evidence rather than the person’s position or association with the group.

What is the status of every enforcement action? The authorities should clarify which matters remain at the preliminary investigation stage, which have resulted in chargesheets or prosecution complaints, which assets remain seized or attached, which actions have been challenged, and what has been decided by the competent courts or authorities.

These are questions of accountability, not a demand for punishment without proof.

The Real Test Is Whether This Case Reaches a Defensible Conclusion

The ED has taken a significant step by seizing assets worth ₹2,032.81 crore under FEMA. The company has challenged the allegations and asserted that the historic transactions were undertaken with the required approvals.

The next stage must be about evidence, legal process and results.

Investigators should reconstruct the entire transaction chain, obtain records from the relevant foreign and Indian institutions, verify the alleged beneficial ownership and trace the ultimate use of funds. They should also examine the company’s explanations and any supporting documentation. Where evidence supports an offence, the responsible persons should be proceeded against under the applicable law. Where an allegation is not substantiated, that too should be stated clearly.

The public should not be expected to choose between an agency’s allegations and a corporate denial. The purpose of a fair investigation is to establish what actually happened.

Nor should the age of the transactions become an excuse for indefinite uncertainty. A financial trail extending back to 2006 presents obvious evidentiary challenges, but delay increases the importance of preserving records, obtaining foreign banking information, establishing the chain of custody of documents and recording reliable witness testimony.

The ED and CBI should publish meaningful, periodic status updates consistent with legal restrictions and the integrity of the proceedings. The competent authorities should ensure prompt adjudication of the FEMA seizure, while courts should prioritise the cases in accordance with law and procedural fairness. Investigators must pursue the actual beneficiaries and any facilitators, including any public or financial-sector officials whose conduct is supported by evidence.

The demand should be equally firm on both sides: no special treatment for influential business groups, and no punishment by publicity in place of proof.

A powerful business name cannot be a shield against scrutiny. But a powerful enforcement allegation cannot be a substitute for a legally sustainable case either.

Conclusion: Seizures Make Headlines; Timely Justice Establishes Accountability

The Reliance Power FEMA action raises serious questions because the ED alleges a complex chain linking historic foreign borrowing, offshore deposits, collateralised lending, overseas entities, round-tripping and allegedly fabricated documentation. Those allegations warrant close scrutiny and a rigorous investigation.

The wider record of separate cases involving companies associated with the Reliance Anil Ambani Group reinforces the importance of examining corporate controls, related-party transactions, lender protection and the conduct of responsible individuals. It does not justify merging separate allegations into a single conclusion of guilt.

The authorities have already been asked by the Supreme Court to conduct investigations fairly, transparently and within a time-bound framework. The public should now expect a clear account of progress, the evidence gathered and the legal steps taken.

A seizure worth thousands of crores may demonstrate the seriousness with which an agency is treating a matter. It does not, by itself, establish the truth of every allegation. Equally, a categorical denial does not remove the need for independent verification.

The ultimate test is whether the money trail can be established, the evidence can withstand judicial scrutiny, and the cases can reach their lawful conclusion without unnecessary delay.

When a financial investigation spans two decades, “investigation continuing” cannot become the final answer. The public deserves a complete account of the evidence, and the law demands a timely, fair and defensible outcome.

Strong Legal and Editorial Disclaimer

This article is based on publicly reported enforcement actions, official agency releases, regulatory disclosures and court records available as of 18 October 2026. The allegations concerning offshore transactions, fund diversion, fabricated or backdated documents, bank fraud and other matters are attributed to the relevant investigating or regulatory authorities and must be read in that context.

An allegation is not a conviction. A seizure is not a final determination of guilt. An FIR, an investigation or a prosecution complaint does not by itself establish criminal liability. Reliance Power has disputed the allegations in the current FEMA matter and has asserted that the historic transactions were undertaken with the required approvals. The group has also denied allegations reported in separate regulatory proceedings.

This report has not identified a final criminal conviction of Anil Ambani on the specific financial-fraud allegations discussed here. That statement is limited to the matters reviewed for this report and should not be interpreted as a claim about every proceeding involving any person or group entity. Regulatory orders, appeals and ongoing criminal proceedings have distinct legal consequences and must be described accurately.

Nothing in this article should be understood as declaring any person or company guilty before the competent court or authority has determined the matter. Any individual or company concerned should be given a fair opportunity to respond to specific allegations, and any material response or subsequent judicial decision should be reflected in an updated report.

The public-interest demand is for independent, transparent and time-bound investigations, protection of lawful shareholder and creditor interests, and prompt trials wherever charges are brought—not for prejudgment or punishment without due process.