ED seizes ₹2,032 crore of Reliance Power assets under FEMA; company disputes allegations

The Enforcement Directorate (ED) has seized assets worth ₹2,032.81 crore belonging to Anil Ambani-led Reliance Power Ltd under the Foreign Exchange Management Act (FEMA), the agency said on Wednesday, 14 October, according to Business Today and ANI. Reliance Power said it disputes the allegations.

What the ED says

The seizure, made under Section 37A of FEMA, covers Reliance Power’s shareholding in its wholly owned subsidiary Sasan Power Ltd and its bank balances. The ED said the assets “are equivalent in value to the foreign exchange held outside India in contravention of Section 4 of FEMA,” according to Business Today.

• Total seized: ₹2,032.81 crore
• Sasan Power shares: ₹2,026.65 crore; bank balances: ₹6.16 crore (company filing)
• Write-offs and provisions flagged by SEBI: ₹2,101.46 crore
• FEMA searches: 6–8 March 2026

According to the ED, as reported by Business Today and ANI, the probe began after the Securities and Exchange Board of India (SEBI) shared information on write-offs and provisions in Reliance Power’s books linked to overseas investments and advances to companies in the British Virgin Islands (BVI) and the Cayman Islands.

The agency alleges that Reliance Natural Resources Ltd, which later merged into Reliance Power, raised $300 million through foreign currency convertible bonds in 2006, of which $275 million went to a Singapore subsidiary. The ED alleges these funds were placed as deposits with Deutsche Bank (Suisse) SA in Geneva and used as collateral for loans to BVI entities that, it claims, were controlled from India by the Reliance Anil Ambani Group through front persons. The ED further alleges that loan proceeds were used for temporary round-tripping of funds into India via Mauritius-based entities, that the BVI entities did not repay the loans, and that documents were backdated. “The funds were utilised for the benefit of the Reliance Anil Ambani Group and parties outside India,” the ED said, according to Business Today. These are allegations and have not been tested in court.

Company’s response

In a stock exchange filing dated 13 October, Reliance Power said the transactions were undertaken with all applicable approvals and disputed the allegation that it contravened Section 4 of FEMA, Business Today reported. The company said the seizure is provisional and subject to confirmation by the competent authority, that no penalty has been imposed, and that it is assessing the financial implications. It said it “shall take all appropriate steps to safeguard its interest.”

The company also said the seized Sasan Power shares were already pledged to state-owned Power Finance Corporation under security arrangements in place for more than 10 years. The order bars it from transferring, selling or pledging the seized assets.

Market reaction

Reliance Power shares fell as much as 1.5 per cent on Wednesday to an intraday low of ₹19.74, against a previous close of ₹20.05, Business Today reported.

Sources: Business Today, Business Today, The News Mill (ANI)