Reliance Power, Reliance Infra shares drop 5% each; why ADAG stocks are falling today

Shares of Reliance Power Ltd and Reliance Infrastructure tumbled 5 per cent each in Thursday's trade as the Enforcement Directorate raided nearly three dozen premises linked to Reliance Group chairman Anil Ambani in Mumbai and New Delhi in connection with a money laundering case.

Sources said several agencies and institutions, including the National Housing Bank, SEBI, the National Financial Reporting Authority (NFRA), and Bank of Baroda, have shared information with the Enforcement Directorate (ED) as part of the ongoing probe. Over 35 premises, 50 companies and over 25 persons were covered in today’s search operation u/s 17 of the Prevention of Money Laundering Act.

The ED's preliminary investigation has uncovered a meticulously planned scheme to siphon off public funds by defrauding banks, shareholders, investors, and other public institutions, sources said.

Allegations of bribery involving bank officials, including a promoter of Yes Bank Limited, are also under scrutiny, sources added.

Initial findings suggest an illegal diversion of approximately Rs 3,000 crore in loans from Yes Bank during the period 2017–2019, as per sources. The ED has observed that shortly before these loans were sanctioned, entities linked to the bank’s promoters received suspicious funds. Investigators are probing this suspected nexus of bribery and loan disbursal.

Serious irregularities have been detected in YES Bank's loan approvals to RAAGA companies. These include back-dated Credit Approval Memorandums (CAMs), proposals for investments made without due diligence or credit analysis, and violations of the bank's credit policy.

Following the report, Reliance Power Ltd was locked at its 5 per cent lower circuit limit at Rs 59.70 apiece on BSE. Reliance Infrastructure Ltd hit its circuit limit at Rs 360.05.  

As per a report YES Bank disbursed approximately Rs 3,000 crore in loans to RAAGA companies -- entities under the Reliance Anil Ambani Group between 2017 and 2019.  The ED claims to have detected an illegal quid pro quo arrangement wherein promoters of YES Bank allegedly received payments in their privately held concerns just before sanctioning the loans, NDTV reported.