Reliance Power: ED seizes Rs 2,032.81 crore in assets

The Enforcement Directorate (ED) said on 14 October 2026 that it had seized assets worth Rs 2,032.81 crore in India belonging to Reliance Power under the Foreign Exchange Management Act (FEMA), 1999. The assets include bank balances and Reliance Power’s shareholding in Sasan Power, according to the agency’s press release. Reliance Power disputes the alleged violation.

The seizure order was issued and received on 12 October 2026, Reliance Power said in its stock exchange disclosure dated 13 October 2026. The company described the seizure as provisional, requiring confirmation by the competent authority, and said no penalty had been imposed.

The distinction matters: the ED has restricted dealings in specified assets while pursuing alleged foreign exchange violations. The supplied documents do not establish a final determination against the company or a completed confiscation.

Sasan Power shares account for most of the seizure

Reliance Power’s filing separates the assets into Sasan Power shares valued at Rs 2,026.65 crore and bank balances of Rs 6.16 crore. Sasan Power is its wholly owned subsidiary, meaning Reliance Power owns all its shares.

According to the company’s disclosure, the order restrains the transfer, sale, pledge, encumbrance or other dealings in the seized assets. An encumbrance is a claim or restriction over an asset, such as security granted to a lender.

These are shares held by Reliance Power in Sasan Power, not a stated seizure of Sasan Power’s physical operating assets. Neither the company filing nor the ED release reports a takeover of the subsidiary’s operations.

Reliance Power also said the shares had already been pledged to Power Finance Corporation, a government undertaking, under security arrangements in place for more than 10 years. A pledge gives a lender security over shares against a borrowing obligation.

That existing pledge introduces a separate issue from the ED’s allegations: how the seizure restrictions interact with the lender’s security rights. The supplied documents do not explain that interaction, and they contain no response from Power Finance Corporation. Reliance Power said it was assessing the financial implications of the order.

ED traces the inquiry to overseas accounting losses

The ED said its investigation began with information received from the Securities and Exchange Board of India (SEBI), the securities-market regulator, about write-offs and provisions totalling Rs 2,101.46 crore in Reliance Power’s accounts. These concerned overseas investments and advances to companies in the British Virgin Islands and the Cayman Islands, according to the agency’s release.

A write-off removes an amount from the accounts when it is treated as no longer recoverable. A provision recognises an expected loss or reduction in recoverable value. Neither accounting treatment, by itself, establishes wrongdoing; the underlying transactions and their compliance with the law have to be examined.

The Rs 2,101.46 crore accounting figure is distinct from the Rs 2,032.81 crore asset seizure. The ED identified the former as the information that triggered the inquiry and the latter as the value of domestic assets seized. Its release does not reconcile the difference.

The agency said it conducted FEMA searches from 6 March 2026 to 8 March 2026, seized material it described as incriminating and recorded statements. The underlying documents and statements are not included in the supplied material, so their contents cannot be independently assessed here.

The alleged route through Singapore, Geneva and offshore entities

According to the ED, Reliance Natural Resources, which subsequently merged with Reliance Power, raised USD 300 million through foreign currency convertible bonds in 2006. Of that amount, USD 275 million was invested in its wholly owned Singapore subsidiary, Reliance Natural Resources (Singapore) Pte Ltd.

Foreign currency convertible bonds are borrowings denominated in a foreign currency that can be converted into shares under agreed terms. Raising money through such bonds is separate from the question of how the proceeds are subsequently invested or used.

The ED said the Singapore subsidiary deposited the funds with Deutsche Bank (Suisse) SA in Geneva. Those deposits allegedly served as collateral, or security for repayment, for loans to entities incorporated in the British Virgin Islands.

The agency alleged that those entities were controlled from India by the Reliance Anil Ambani Group through people acting on the group’s directions. It further alleged that the loan proceeds benefited the group and were parked overseas, with some funds temporarily routed back to India through Mauritius-based entities.

That return of funds through an overseas route is commonly called round-tripping. The term describes a transaction pattern; whether a particular arrangement breaches the law depends on its facts and applicable permissions.

The ED said the British Virgin Islands entities failed to repay the loans. It alleged that documents were then fabricated and backdated to portray payments as genuine business advances from the Singapore subsidiary and Reliance Power’s Indonesian subsidiaries. These remain the investigating agency’s allegations, not findings by a court or a final adjudicating authority.

FEMA provisions and Reliance Power’s response

FEMA governs foreign exchange transactions and cross-border financial dealings. Section 4 concerns restrictions on holding, owning, possessing or transferring foreign exchange, foreign securities and overseas immovable property except as permitted under the legal framework. It does not make every overseas investment unlawful.

The ED invoked Section 37A to seize Indian assets that it said were equivalent in value to foreign exchange held abroad in contravention of Section 4. On that account, the domestic assets represent the value the agency is seeking to secure; the release does not say the Sasan Power shares themselves were the original overseas investment.

Reliance Power’s exchange filing gives a different position on compliance. It said the order concerned bonds issued in 2006 and a related overseas investment made in 2008 in a Singapore subsidiary with all applicable approvals. The company expressly disputed the alleged Section 4 contravention.

The filing was made under Regulation 30 of SEBI’s Listing Obligations and Disclosure Requirements Regulations, 2015. These disclosure rules require listed companies to inform the market about specified material developments, including relevant communications from enforcement authorities.

Reliance Power said it would take appropriate steps, on legal advice, to protect its interests and those of shareholders and other stakeholders. The supplied filing does not identify a challenge already lodged or a hearing date. It also does not provide a transaction-by-transaction response to the ED’s allegations concerning control of offshore entities, the use of loan proceeds or backdated documentation.

This report is based on the supplied ED release, company filing and reporting; live research was not possible. The original seizure order, underlying SEBI information and any subsequent confirmation decision were not available in that material. The ED said its investigation remained under way, while the company’s disclosure left the financial implications under assessment and confirmation of the provisional seizure unresolved.