ED raids 6 Reliance Infrastructure-linked premises in Indore, Mumbai
What's the story
The Enforcement Directorate (ED) conducted raids at six locations of Anil Ambani's Reliance Infrastructure in Mumbai and Indore on Tuesday. The action comes as part of an investigation into alleged illegal remittances under the Foreign Exchange Management Act (FEMA). The ED's investigation centers on several companies in Ambani's business empire, particularly Reliance Infrastructure. The company is accused of diverting loans worth over ₹17,000 crore.
Investigation details
Probe into alleged diversion of loans
The ED, citing findings from a Securities and Exchange Board of India (SEBI) report, alleged that the Reliance Infrastructure routed funds to other entities within the Reliance Group through inter-corporate deposits (ICDs). These transactions were allegedly done via a firm called CLE, which was not disclosed as a "related party" by Reliance Infrastructure.
Probe expansion
ED summons 39 banks
As part of its larger probe into the alleged loan fraud, the ED has also summoned 39 banks. The agency has sought explanations for their possible due diligence lapses in failing to flag suspicious loans or report them to regulatory authorities when borrowing entities started defaulting on repayments. In August, the younger Ambani appeared before the ED in connection with a money laundering probe linked to multiple fraud cases involving several group companies.
Denial statement
Reliance Group denies wrongdoing
The Reliance Group has denied any wrongdoing. The company issued a statement saying that the allegation of diverting ₹10,000 crore to an undisclosed party was a decade-old matter and its exposure was only around ₹6,500 crore. It further claimed that through mandatory mediation proceedings conducted by a retired Supreme Court judge and a mediation award filed before the Bombay High Court, Reliance Infrastructure settled to recover its full exposure of ₹6,500 crore.