The Enforcement Directorate (ED) has seized shares worth ₹2,026.65 crore in Reliance Power’s wholly owned subsidiary Sasan Power Ltd and bank balances of ₹6.16 crore under Section 37A(1) of the Foreign Exchange Management Act (FEMA), the company disclosed in a regulatory filing on Tuesday.
Reliance Power said the ED’s seizure order, dated October 12, relates to foreign currency convertible bonds issued in 2006 and an overseas investment made in 2008 in a Singapore-based subsidiary. The company said the investments were made with all applicable approvals.
The company disputed the allegations of contravention of Section 4 of FEMA, 1999, and said the seizure was provisional and subject to confirmation by the competent authority under Section 37A of the Act.
Reliance Power said the shares of Sasan Power were already pledged in favour of Power Finance Corporation Ltd, a government of India undertaking, under security arrangements in place for more than 10 years.
The order restrains the transfer, sale, pledge, encumbrance or any other dealing with the seized assets. No penalty has been imposed, the company said.
Reliance Power said it was assessing the financial implications of the order and would take appropriate steps to safeguard its interests and those of its shareholders and other stakeholders, as may be legally advised.
