ED Seizes Rs 55 Crore From Reliance Infrastructure In Foreign Exchange Violation Investigation

Further investigation into the case is currently underway.

New Delhi:

The Directorate of Enforcement (ED), Special Task Force at its Headquarters, has executed a significant operation against suspected foreign exchange violations, seizing assets valued at Rs 54.82 crore belonging to Reliance Infrastructure Limited (R-Infra).

Among the seized assets are 13 bank accounts of the company. This action was carried out under Section 37A of the Foreign Exchange Management Act (FEMA), 1999.

According to ED investigations, R-Infra allegedly diverted funds through its Special Purpose Vehicles (SPVs) that were originally allocated for National Highways Authority of India (NHAI) road construction projects. These funds were reportedly channeled into Mumbai-based shell companies under the guise of fake sub-contracting work. The shell entities were apparently created using dummy directors and operated through specific banking channels to evade detection.

The funds underwent a complex layering process across multiple shell entities before being transferred overseas to the United Arab Emirates (UAE), supposedly for importing polished and unpolished diamonds. However, investigators found no evidence of actual goods being delivered or legitimate documentation supporting these transactions. The UAE companies involved maintained banking facilities in both UAE and Hong Kong, and were discovered to have connections with individuals engaged in illegal international hawala operations.

The investigation has further revealed that the shell companies implicated in this scheme are associated with hawala transactions exceeding Rs 600 crore.

The ED has implemented provisions under Section 4 of FEMA regarding alleged contraventions involving unauthorized foreign remittances and misappropriation of public funds.

According to the ED, this diversion of funds created severe cash-flow challenges for the SPVs, resulting in bank loans becoming Non-Performing Assets (NPAs). This situation has caused substantial losses to lending institutions and compromised public infrastructure interests.

Further investigation into the case is currently underway.