Reliance Power, Reliance Infra shares locked in lower circuit; here is why

Shares of companies promoted by Anil Ambani – Reliance Infrastructure and Reliance Power – were locked in a 5% lower circuit at ₹360.05 and ₹59.70, respectively, on the BSE on Thursday, July 24.

The stocks took a knock after news reports suggested that the Enforcement Directorate (ED) conducted raids as part of its money laundering investigation linked to an alleged bank loan fraud of ₹3,000 crore against Anil Ambani group companies and Yes Bank.

The report added that the ED is investigating allegations of illegal loan disbursal of around ₹3,000 crore from Yes Bank between 2017 and 2019. The investigating agency has found out that just before the disbursal of the loan amount, Yes Bank promoters received money.

The agency is investigating this nexus of "bribe" and the loan.

ED is investigating allegations of "gross violations" in Yes Bank loan approvals to Reliance Anil Ambani Group companies, such as back-dated credit approval memorandums (CAMs) and investments proposed without any due diligence/credit analysis in violation of the bank's credit policy.

The money laundering case stems from at least two CBI FIRs and reports shared by the National Housing Bank, SEBI, National Financial Reporting Authority (NFRA) and Bank of Baroda, sources told PTI.

Meanwhile, State Bank of India (SBI) classified another Anil Ambani company, Reliance Communications (RCom), as a fraud account last month.

Earlier this month, Canara Bank informed the Bombay High Court that it has withdrawn its order classifying as “fraudulent” the loan account of a firm linked to Ambani.

The loan account concerned Ambani’s firm Reliance Communications, which is undergoing insolvency proceedings.

Meanwhile, both the companies issued clarifications.

Reliance Power and Reliance Infrastructure in seperate press releases said that the said actions have absolutely no impact on the business operations, financial performance, shareholders, employees, or any other stakeholders of Reliance Power and Reliance Infrastructure.

They added that the media reports appear to pertain to allegations concerning transactions of Reliance Communications Limited (RCOM) or Reliance Home Finance Limited (RHFL) which are over 10 years old.