ED Seizes 13 Bank Accounts Of Anil Ambani's Reliance Infra Over FEMA 'Violations'

The Enforcement Directorate (ED) on Wednesday said it has seized more than a dozen bank accounts, holding about Rs 55 crore worth deposits, of Anil Ambani Group company Reliance Infrastructure as part of a hawala-linked FEMA investigation.

It alleged in a statement that Reliance Infrastructure Ltd (R-Infra), through its special purpose vehicles (SPVs), siphoned public funds from highway construction projects awarded by the National Highways Authority of India (NHAI) and sent them to the UAE illegally.

The investigation pertains to a 2010 tender that was awarded to the company as an EPC (engineering, procurement and construction) contract to build the JR Toll Road (Jaipur-Reengus highway).

The agency said 13 bank accounts having a balance of Rs 54.82 crore of R-Infra have been seized for "contravention" of the Foreign Exchange Management Act.

R-Infra said in a regulatory filing on Tuesday that it has received an order from the ED "whereby it has placed lien in the Company's bank accounts for Rs 77.86 crore in relation to alleged violations under FEMA."

The ED had summoned Ambani (66) for questioning in this case last month but he did not depose saying he could only make a "virtual appearance". It was not clear if the agency called him again.

A statement issued by Ambani's spokesperson last month said this was "a purely domestic contract with no foreign exchange component involved whatsoever."

"The JR Toll Road has been fully completed and, from 2021 onwards, has been with the NHAI," the statement had said.

Describing the alleged fraud, the ED said funds were diverted under the guise of sham sub-contracting arrangements to shell companies in Mumbai and these entities were set up in a coordinated manner using dummy directors at specific bank branches in Mumbai.

These funds, according to the agency, were "layered" through a network of other shell entities and remitted to the UAE in the guise of import of polished and unpolished diamonds without receipt of any equivalent goods or documentation.

The UAE entities to which funds were remitted had bank accounts in both the UAE and in Hong Kong. These entities were found to be controlled by individuals engaged in international hawala transactions, it said.

"The shell entities through which these funds were siphoned are found to be involved in international hawala transactions worth more than Rs 600 crore," the ED said.

This alleged diversion of the project funds led to "severe" financial stress in the affected SPVs, resulting in bank loans turning into non-performing assets (NPAs), thereby causing losses to lenders and jeopardising public financial interests, it said.

The November statement from the businessman's spokesperson said Ambani served the company (R-Infra) for about 15 years, from April 2007 to March 2022, only as a non-executive director and was never involved in its day-to-day management.