Shares of Reliance Power fall over 4% after ED files charge sheet in fake bank guarantee case

Shares of Reliance Power fell as much as 4.5% on the BSE on Monday to Rs. 36.01, extending a month-long slide after the Enforcement Directorate accused it of using fake bank guarantees to secure government tenders.

The latest announcements added pressure on a stock already on a steady decline this year, even as the group reiterated that it was the “victim of fraud, forgery and fraud conspiracies”.

The chargesheet filed in the Patiala House Court on Friday names former chief financial officer Ashok Kumar Pal, Reliance NU BESS Ltd, Rosa Power Supply Company Ltd, Odisha-based Biswal Tradelink and its managing director Partha Sarathi Biswal, Biothane Chemicals and consultant Amarnath Dutta. The case stems from a November 2024 complaint by the Delhi Police’s Economic Offenses Wing, which alleged that Biswal engaged in giving “fake” guarantees for TradeLink fees.

According to the ED, the case relates to a tender submitted to Solar Energy Corporation of India on behalf of Reliance NU BESS, formerly Maharashtra Energy Generation Limited, for building standalone battery energy storage projects of 1000 MW/2000 MWh worth Rs. 68.2 crore related to bank guarantee. Investigators said the group officials were aware that the guarantee was “fake” and that the “fraudulent” endorsement was sent to SECI from a fake State Bank of India email domain.

Once SECI raised concerns, Reliance got a fresh guarantee from IDBI Bank “within a day”, but it was rejected as it was submitted after the deadline. The charge sheet also asserts that officials tried to keep the bid alive by seeking support from the SBI branch in Kolkata.

The agency alleged that the group executed a “dummy” contract and obtained a “certificate of registration” for Reliance NU BESS from the Kolkata Municipal Corporation using “bogus” address documents. It further claims that Biswal Tradelink arranged fake guarantees allegedly issued by the “non-existent” Manila branch of FirstRand Bank and by ACE Investment Bank in Malaysia, with fake endorsements sent from the fake domain “s-bi.co.in”.

Investigators say that under “fake transport services” from Rosa Power Supply Company, Biswal Tradelink received Rs. 6.33 crore were remitted, supported by “fake” work orders and “fake” invoices. After arranging the guarantee, to make the transaction appear legitimate, an additional Rs. 5.40 crore was paid. When efforts to get valid support failed, Reliance officials filed a complaint against Biswal Tradelink and its managing director. Biswal, Pal and Dutta were subsequently arrested and are in judicial custody. The ED said it has seized assets worth Rs 5.15 crore during its investigation.

The Reliance Group has stated that Anil Ambani “was not on the board of Reliance Power Limited for more than 3.5 years and is not concerned in any way” and the company disclosed the issue to the stock exchange on 7 November 2024.

The stock’s fall on Monday took its losses for the year to 20%, along with a 22% decline over the past three months. Reliance Power is trading below all eight of its key moving averages, while its Relative Strength Index stands at 36.0 and its MACD remains below the center line.

(disclaimer: Recommendations, suggestions, opinions and views given by experts are their own. (These do not represent the views of The Economic Times)