ED arrests Reliance Power CFO Ashok Kumar Pal in money laundering case

The Enforcement Directorate (ED) on Friday, 10 October, arrested Ashok Kumar Pal, chief financial officer (CFO) at Reliance Power Ltd and a close aide of industrialist Anil Ambani, in connection with a high-profile money laundering investigation involving a fake bank guarantee case tied to the ADA Group.

Pal was taken into custody after being questioned at the ED’s Delhi office and is expected to be produced before a judicial authority. The investigation centers around alleged financial misconduct by the ADA Group, formerly headed by Anil Ambani, and involves companies linked to Yes Bank.

The ED has alleged that Anil Ambani and associated entities under the Reliance Group were involved in a massive Rs 17,000-crore loan fraud. This arrest adds a significant development to the ongoing probe into one of India’s most closely watched corporate financial cases.

Earlier this week, the Bombay High Court upheld the State Bank of India’s (SBI) classification of the loan accounts of Anil Ambani and Reliance Communications (RCom) as “fraud,” affirming that the bank’s decision was legally sound and justified. A division bench of Justices Revati Mohite Dere and Neela Gokhale, in an order dated 3 October, dismissed Ambani’s petition challenging the SBI ruling.

Anil Ambani had contended that the order was invalid because he was neither granted a personal hearing nor provided access to all relevant documents. However, the court observed that under the Reserve Bank of India’s Master Directions governing such proceedings, borrowers are entitled only to submit a written representation and not to a personal hearing. The bench held that Ambani’s arguments lacked merit, effectively upholding SBI’s designation of the accounts as fraudulent.

The classification by SBI, made on June 13, cited multiple reasons, including diversion of funds, breach of covenants, and related-party transactions, and the matter was referred to the Central Bureau of Investigation (CBI) for further action. Similarly, Bank of Baroda had earlier categorised the loan accounts of Reliance Communications and Anil Ambani as fraudulent.

The ED’s arrest of Pal marks a significant escalation in the probe, signaling the agency’s intent to pursue key executives involved in financial irregularities and corporate malfeasance linked to the ADA Group.

With IANS inputs