Shares of Anil Ambani-led Reliance Group companies experienced a significant decline of approximately 5% following reports of an Enforcement Directorate (ED) investigation into an alleged Rs 17,000 crore loan fraud case. The news has sent ripples through the market, affecting multiple companies within the group.

Stock Performance

• Reliance Power saw a 5% drop, with its share price falling to Rs 47.58.
• Reliance Infrastructure experienced a decline of 4.98%, with shares trading at Rs 296.15.
• Reliance Home Finance shares fell by 4.84%, reaching Rs 4.84.

Investigation Details

The Enforcement Directorate is reportedly planning to question officials from both public and private sector banks that provided loans to Reliance Group entities. The agency has already summoned Anil Ambani as part of its investigation. The ED's primary focus is to understand the actions taken by banks after group companies defaulted on loan repayments.

Loan Default Allegations

According to reports, loans totaling around Rs 17,000 crore to various Reliance Group companies have allegedly become non-performing assets. The companies involved include:

• Reliance Home Finance Ltd
• Reliance Commercial Finance Ltd
• Reliance Communications

The case reportedly involves nearly 20 lenders, highlighting the scale of the alleged fraud.

Technical Analysis

A brief look at the technical indicators reveals:

Reliance Power and Reliance Infrastructure are currently in oversold territory, while Reliance Home Finance remains in neutral territory based on their Relative Strength Index (RSI) values.

The ongoing investigation and its potential implications have clearly impacted investor sentiment towards Reliance Group companies. As the ED probe unfolds, market participants will be closely watching for further developments in this high-profile case.

The Enforcement Directorate (ED) has taken a significant step in cracking down on financial fraud, arresting Partha Sarathi Biswal, the Managing Director of Biswal Tradelink, an Odisha-based company. The arrest comes in connection with an alleged fake bank guarantee issuance racket that has sent shockwaves through the business community.

The Scam Unveiled

Biswal Tradelink is accused of operating a sophisticated scheme that involved issuing fraudulent bank guarantees to various business groups. The company reportedly charged an 8.00% commission for these illicit services, highlighting the lucrative nature of the operation.

High-Profile Victim

In a startling revelation, a fake bank guarantee worth Rs 68.20 crore was submitted to Solar Energy Corp on behalf of Reliance NU BESS Ltd, a subsidiary of Reliance Power. This incident underscores the far-reaching implications of the scam, affecting even major players in the energy sector.

ED's Swift Action

The Enforcement Directorate conducted thorough searches across four locations:

• Three premises in Bhubaneswar
• One premise in Kolkata

These raids uncovered seven previously undisclosed bank accounts associated with Biswal Tradelink. The transactions in these accounts were found to be disproportionate to the company's declared turnover, raising further suspicions about the scale of the fraudulent activities.

Sophisticated Deception

The investigation revealed a complex web of deception. Biswal Tradelink allegedly used a fake email domain (s-bi.co.in) to impersonate State Bank of India in their communications. This tactic was likely employed to lend credibility to their fraudulent bank guarantees.

Reliance Power's Response

Reliance Power has stated that it was a victim of this elaborate fraud. The company took prompt action by filing a criminal complaint with the Delhi Police, demonstrating its commitment to addressing the issue through proper legal channels.

Dubious Operations

Further scrutiny of Biswal Tradelink's operations raised additional red flags:

• The company was found to be operating from a residential property
• No actual business records were discovered at the registered address

These findings suggest a deliberate attempt to conceal the true nature of the company's activities.

Implications and Ongoing Investigation

This case highlights the critical need for stringent verification processes in financial transactions, especially those involving large sums and high-profile entities. As the ED continues its investigation, the business community awaits further developments and potential safeguards against such sophisticated financial frauds in the future.

The arrest of Partha Sarathi Biswal marks a significant milestone in this case, but it may only be the tip of the iceberg. As the investigation unfolds, it could potentially reveal more about the extent of this fake bank guarantee racket and its impact on the Indian financial landscape.