Reliance Power Shares Surge 8% Following Clarification on ED Arrest

Reliance Power shares witnessed a significant uptick on Wednesday, climbing 7.8% to Rs 42.30. This surge came in the wake of the company's clarification regarding a recent arrest made by the Enforcement Directorate (ED) in connection with a fake bank guarantee case.

Company Denies Connection to Arrested Individual

Reliance Power issued a statement asserting that Amar Nath Dutta, the individual arrested by the ED, has no association with the company or any of its subsidiaries. The company emphasized that it is, in fact, a victim of fraud in this case and assured stakeholders that the arrest would not impact its business operations.

Details of the Case

The case revolves around alleged forged bank guarantees worth over Rs 68 crore, which were reportedly arranged to help a Reliance Power subsidiary qualify for a Solar Energy Corporation of India (SECI) tender. Dutta is accused of collaborating with previously arrested individuals, including the company's former CFO, in this scheme.

Broader Investigation

This incident is part of a larger ED investigation into Anil Ambani's Reliance Group. The probe has already resulted in asset attachments worth over Rs 7,500 crore and allegations of loan diversions between 2010-2012.

Market Response and Future Outlook

The market's positive reaction to Reliance Power's clarification reflects investor relief over the company's stance. Additionally, the share price rally comes as the company approaches its quarterly results announcement. Investors may be optimistic following Reliance Power's turnaround in the previous quarter, where it reported a profit of Rs 44.68 crore compared to a loss of Rs 97.85 crore in the same period last year.

Key Points	Details
Share Price Movement	Up 7.8% to Rs 42.30
ED Case Involvement	Company denies any connection
Alleged Fraud Amount	Over Rs 68 crore in fake bank guarantees
Previous Quarter Performance	Rs 44.68 crore profit (vs Rs 97.85 crore loss year-on-year)
Total ED Asset Attachments	Over Rs 7,500 crore

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-0.60%	-5.05%	-6.24%	-37.34%	-7.08%	+1,039.70%

The Enforcement Directorate (ED) has intensified its investigation into an alleged money laundering case involving Reliance Power , making its third arrest in connection with a fake bank guarantee worth Rs 68 crore. Amar Nath Dutta was apprehended by the ED, joining two previously arrested individuals in this ongoing probe.

Case Overview

The case centers around a fraudulent bank guarantee submitted to the Solar Energy Corporation of India by Reliance NU BESS Limited, a subsidiary of Reliance Power. The ED's investigation has uncovered a complex web of financial misconduct, leading to multiple arrests.

Key Developments

Latest Arrest

Amar Nath Dutta has been taken into custody by the Enforcement Directorate.

Previous Arrests

Ashok Kumar Pal, former CFO of Reliance Power
Partha Sarathi Biswal of Biswal Tradelink

Fraudulent Scheme

The investigation revealed that Biswal Tradelink operated a racket providing fake bank guarantees for an 8% commission.

Modus Operandi

The fraudsters employed sophisticated tactics to create an illusion of legitimacy:

Used a fake email domain similar to State Bank of India's
Claimed the bank guarantee was from FirstRand Bank in Manila
FirstRand Bank has no branch in the Philippines

Reliance Power's Stance

Reliance Power has stated that it is a victim of fraud and has filed a criminal complaint with the Delhi Police. The company clarified that Anil Ambani has not been on Reliance Power's board for over 3.5 years.

This case highlights the ongoing challenges in financial regulation and the sophisticated nature of financial crimes in the corporate sector. As the investigation progresses, it may have broader implications for corporate governance and financial oversight in India.