ED Conducts FEMA Raids at Reliance Infrastructure Locations Over Alleged Illegal Foreign Remittances

New Delhi:

The Enforcement Directorate conducted searches across Maharashtra and Madhya Pradesh on Tuesday as part of a Foreign Exchange Management Act (FEMA) investigation against Anil Ambani's Reliance Infrastructure, according to official sources.

The agency raided at least six premises of associated entities in Mumbai and Mhow, Indore. These unexpected searches were related to allegations of illegal foreign remittances made by Reliance Infrastructure.

In response, Reliance Infrastructure released a statement clarifying that the ED action pertained to a matter "dating back 15 years." The company explained, "In 2010, the company had awarded an EPC contract for the construction of the JR Toll Road (Jaipur-Ringus Highway) to Prakash Asphaltings & Toll Highways." They emphasized, "This was a domestic contract with no foreign exchange involved."

The company further stated that the work had been completed and they no longer maintain any connection or relationship with the contractor. The toll road has been under National Highways Authority of India (NHAI) management for the past 4 years.

This FEMA investigation runs parallel to the ED's ongoing probe into alleged financial irregularities and collective loan "diversion" estimated at over Rs 17,000 crore by multiple Anil Ambani group companies, including Reliance Infrastructure, under the Prevention of Money Laundering Act (PMLA).

The PMLA investigation was initiated based on a Securities and Exchange Board of India (SEBI) report that alleged Reliance Infrastructure had "diverted" funds disguised as inter-corporate deposits to Reliance Group companies through an entity named CLE. The allegations suggest that Reliance Infrastructure did not disclose CLE as a "related party" to avoid obtaining necessary approvals from shareholders and audit committees.

Previously, the Reliance Group had denied any wrongdoing, stating that allegations regarding the diversion of Rs 10,000 crore were approximately 10 years old. The group maintained that their financial statements indicated exposure of only around Rs 6,500 crore.

Regarding the current FEMA investigation, Reliance Infrastructure assured that the action has had "absolutely no impact on the business operations, financial performance, shareholders, employees, or any other stakeholders of the company."