Why Reliance Power's CFO has been arrested by ED
What's the story
The Enforcement Directorate (ED) has arrested Ashok Pal, the Chief Financial Officer (CFO) of Reliance Power, in a money laundering case. The arrest was made on Friday night after questioning over an alleged fake bank guarantee worth ₹68 crore. Pal will be produced before a special court today where the ED will seek his remand for custodial interrogation.
Case details
Pal played key role in financial activities: ED
The case against Pal relates to a bank guarantee of ₹68.2 crore submitted to the Solar Energy Corporation of India Limited (SECI) on behalf of Reliance NU BESS Limited, a subsidiary of Reliance Power. The guarantee was found to be fake. The ED has alleged that Pal played a key role in the company's financial activities and was instrumental in submitting this bogus bank guarantee with an intent to cheat.
Racket exposure
Reliance Group claimed it was a victim of fraud
The ED's investigation has exposed a racket of providing fake bank guarantees to business groups. Odisha-based company, Biswal Tradelink, was identified as the main player in this scheme. In August, the agency conducted searches against the firm and its promoters and arrested its Managing Director, Partha Sarathi Biswal. The Reliance Group had earlier claimed that Reliance Power was a victim of fraud in this case.
Scheme details
Biswal Tradelink used similar email domain to SBI
The ED's preliminary investigation revealed that Biswal Tradelink was using a similar email domain to SBI's to create a facade of genuineness. This fake domain was used to send forged communication to SECI. The company also facilitated fake bills for commission and used multiple undisclosed bank accounts for suspicious transactions worth crores of rupees.