Shares of Reliance Power and Reliance Infrastructure fell sharply today as the Enforcement Directorate carried out extensive raids on over 35 locations linked to Anil Ambani’s Reliance Anil Dhirubhai Ambani Group. According to Mint, both companies hit their lower circuit limit, down nearly five percent amid allegations of money laundering and large-scale loan diversion involving YES Bank funds.
ED Launches ₹3,000-Crore Money Laundering Probe
ED investigators targeted properties in Mumbai and Delhi associated with multiple entities under the Ambani group. The operation stems from two Central Bureau of Investigation FIRs and intelligence provided by regulatory bodies, including SEBI, the National Housing Bank, NFRA, and Bank of Baroda. The focus is on alleged siphoning of around ₹3,000 crore in loans from YES Bank between 2017 and 2019 via shell companies, possibly involving bribery of bank officials to bypass lending protocol.
Stocks Lock Lower Amid Investor Panic
In afternoon trading, both Reliance Power and Reliance Infrastructure reached their maximum permissible drop for the day—Reliance Power at ₹59.70 and Reliance Infrastructure around ₹360. Market analysts pointed to sudden panic selling by investors reacting to news of the raids and potential regulatory fallout.
Firms Respond: No Operational Impact, Full Cooperation
Reliance Power and Infrastructure quickly issued statements asserting the raids have no impact on their current operations or financials, clarifying that these actions pertain to historic matters involving entities like Reliance Communications and Reliance Home Finance. They emphasized their independence, the absence of Anil Ambani from their boards, and their commitment to cooperate fully with the ED.
Deepening the YES Bank Loan Fraud Investigation
According to Enforcement Directorate sources, the probe suggests that YES Bank may have granted backdated loans or “evergreened” accounts to RAAGA companies without proper due diligence. The ED is also exploring whether officials at YES Bank received payments from Ambani-linked entities just before loan disbursements, suggesting a quid-pro-quo arrangement. These irregularities are alleged to involve violations under the Prevention of Money Laundering Act.
Background: Previous Regulatory Action
This latest investigation follows a 2024 Securities and Exchange Board order that barred Anil Ambani and 24 others from trading in listed securities for five years due to suspected fund diversion. The group’s companies such as Reliance Communications and Home Finance have previously faced insolvency and fraud classifications by the State Bank of India.
What Comes Next
Investigators will now examine financial documents, loan agreements, transaction records, and communications to trace the flow of money. They may also summon YES Bank officials and employees of Ambani-linked firms. SEBI and other regulators are expected to share details that supported the original FIRs.
Market watchers caution that if the ED uncovers strong evidence, the case may broaden to influence shareholding, credit markets, and bank regulations. Legal proceedings under the PMLA, particularly concerning asset attachment and trial, could unfold over the coming quarter.
A Test of Financial Oversight
This probe has cast a spotlight on system-wide vulnerabilities, including weak lending due diligence, potential collusion between corporate borrowers and bank staff, and the challenges of enforcing complex fraud regulations. The outcome will likely influence future governance norms for large corporate entities and financial institutions alike.
Photo Credit: Mint
For more business stories click here
Follow us for latest updates:
