Whalesbook
Allegations of Forgery in SECI Tender
Reliance Power's Chief Financial Officer, Ashok Kumar Pal, and two associates have been arrested by the Economic Offences Wing of Delhi Police over an alleged ₹136 crore forgery scheme. The charges centre on the purported use of fraudulent bank guarantees by Reliance NU BESS Ltd, a subsidiary of Reliance Power, during a Solar Energy Corporation of India (SECI) tender. Investigators allege that fake email communications and fabricated Structured Financial Messaging System (SFMS) confirmations were used to support these purportedly foreign bank guarantees. The State Bank of India later disputed the authenticity of these confirmations. This alleged conspiracy, reportedly involving significant payments to intermediaries for document creation, directly implicates the CFO and raises questions about the company's internal controls.
Deepening Regulatory and Audit Scrutiny
This event follows a period of heightened regulatory attention for Reliance Power. SECI had previously decided in November 2024 to debar the company and its subsidiary from tenders for three years due to similar document irregularities, although this ban was subsequently withdrawn in December 2024. Adding to the governance concerns, the company's auditor issued an unqualified opinion in July 2025 that raised doubts about its ability to continue as a going concern. The Securities and Exchange Board of India (SEBI) also initiated a forensic audit on January 14, 2026, to investigate alleged violations of key regulatory acts.
Market Impact and Financial Pressures
Despite a recent stock price surge of over 40% in April 2026, pushing its shares into the ₹28-₹29 range, these allegations introduce immediate risk. The company's market capitalization was around ₹116 billion in late April 2026. While the renewable energy sector remains active with numerous tenders, Reliance Power's alleged involvement in fraudulent activities could severely hinder its ability to secure future contracts. Competitors like Adani Power, Tata Power, and JSW Energy are operating with P/E ratios in a similar range (around 34-37) but without facing such high-profile fraud allegations. Reliance Power's substantial long-term debt of approximately ₹102.1 billion adds financial pressure to the reputational damage. Although the company reported a recovery to a net profit of ₹2,947.40 crore for the year ending March 2025, this narrative is now challenged by the fresh allegations.
Company Response and Investigations
Investigations by the Enforcement Directorate are ongoing, with the CFO and others currently in police custody. Reliance Power maintains its position that it is a victim of fraud and intends to present its case in court. The company's recent efforts to bolster governance, including forming a Board of Management in November 2025, may be viewed in light of these ongoing challenges. The ultimate outcome of these investigations, the SEBI forensic audit, and their impact on future tender bids remain significant uncertainties for the company's growth prospects and its ability to regain trust with regulatory bodies.