Reliance Power Blames Unnamed Third Party For Fake Bank Guarantee Case

Reliance Power Ltd. said on Thursday that it will legally challenge the Solar Energy Corporation of India Ltd.'s move to bar the Anil Ambani-led company and its subsidiaries from bidding in future tenders for three years after it was found to have submitted fake bank guarantees.

The company and its subsidiaries acted in a bona fide way and have been victims of fraud, forgery and cheating conspiracy, Reliance Power said in an exchange filing on Thursday.

It informed that a criminal complaint over the fraud has been lodged "against the third party" with the economic offences wing of the Delhi Police on Oct. 16. The statement did not name the third party.

Calling SECI's ban an "unwarranted action," Reliance Power said it will take all appropriate legal steps to challenge the decision "in the interest of its more than 40 lakh shareholders."

Earlier in the day, SECI said the debarment is due to fake bank guarantees submitted in the last round of bidding by a subsidiary for the tender process for a 1 gigawatt solar power and 2 gigawatt standalone battery energy storage system in June.

Based on the documents submitted by Reliance NU BESS Ltd., earlier known as Maharashtra Energy Generation Ltd., it was found that the endorsement of the bank guarantee against the earnest money deposit was fake, SECI said.

The subsidiary of Reliance Power had "met the financial qualification requirements using the strength of its parent company."

The state-owned solar player found it logical to conclude that all the commercial and strategic decisions undertaken were fundamentally driven by the parent company. "Thus, it became imperative to debar Reliance Power from participating in the future tenders issued by SECI."

According to a report in the Business Standard newspaper, Reliance NU BESS had blamed a third-party arranger for the fake bank guarantee. However, no such third party is mentioned anywhere in the entire investigation by SECI.

This spurred the bidding process to be called off and SECI to take action against Reliance NU BESS and Reliance Power.