Enforcement Directorate Arrests Consultant in Reliance Power Fraud Case, Anil Ambani to be Questioned

The Enforcement Directorate (ED) has arrested Amar Nath Dutta, a consultant from Kolkata, for his alleged involvement with Reliance Power's former Chief Financial Officer (CFO), Ashok Pal. Dutta is accused of helping to provide a bogus bank guarantee of over Rs 68 crore. This guarantee was reportedly issued by Reliance NU BESS to the Solar Energy Corporation of India (SECI) for a tender. Dutta, who offers trade financing consultancy, has been remanded to ED custody for four days. This marks the third arrest in the case, following Ashok Pal and Partha Sarathi Biswal. The action comes just a week before Anil Ambani is scheduled to be questioned by the ED on November 14. Anil Ambani is under investigation in two money laundering cases linked to alleged bank frauds and conspiracy. The ED previously examined him, and last week, attached assets worth over Rs 7,500 crore belonging to Ambani and his Reliance entities. The agency stated that the bank guarantee contained forged endorsements and fake SFMS confirmations from a Reliance Power subsidiary to SECI. The ED is continuing its probe to identify beneficiaries, trace funds, and uncover the larger conspiracy. The SECI, a public sector undertaking, claims a loss exceeding Rs 100 crore due to the fraudulent guarantee. The ED's money laundering investigation is based on an FIR filed by SECI with the Delhi Police's economic offence wing. Reliance Power is accused of alleged fund diversion, with board resolutions empowering executives to handle tender documents and leverage the company's financial capabilities. Previous searches by the ED in Bhubaneswar and Kolkata uncovered evidence of fake guarantees generated by a shell entity, using spoofed email accounts to appear genuine.

Impact: This arrest and the ongoing investigation into alleged financial fraud at a subsidiary will likely negatively impact investor sentiment towards Reliance Power and the broader Reliance group. It intensifies regulatory scrutiny and could lead to further legal challenges and financial implications, potentially affecting the stock price and business operations. Rating: 8/10.

Heading: Definitions Bogus bank guarantee: A fake or invalid financial guarantee provided to assure performance or payment in a contract or tender. SFMS confirmations: Confirmations of financial transactions sent via the SWIFT network, a secure messaging system used by banks globally. Fake confirmations suggest the transaction was not legitimately processed. Shell entity: A company that exists legally but has minimal or no actual business operations, often used to conceal financial activities or ownership. Spoofed email accounts: Email accounts that are made to look like they come from a legitimate source to trick recipients into revealing information or taking certain actions. Money laundering: The illegal process of making large amounts of money generated by criminal activity appear to have come from a legitimate source. Economic offence wing: A specialized unit within a police force tasked with investigating financial crimes such as fraud, embezzlement, and money laundering.