Fake Email ID For Bank Guarantee: How SECI Exposed Reliance Power's Alleged Fraud
As part of a recent bidding process, a subsidiary of Reliance Power had submitted a 'fake' endorsement for its bank guarantee, SECI said.
The Solar Energy Corp. of India—the government body in-charge of implementing the National Solar Mission—has exposed an alleged fraud of Reliance Power Ltd., as it has accused the company's subsidiary of using a fake endorsement for bank guarantee, while submitting a recent bid.
The Anil Ambani-led company has been barred from submitting bids in future tenders for a three-year period, according to a statement issued by SECI on Thursday. The ban has also been imposed on Reliance Power's subsidiaries, including Reliance NU BESS Ltd.
The SECI action stems from the bid submitted by Reliance NU BESS for the setting up of 1,000 MW/2,000 MWh standalone BESS projects. The tender for the project was issued by SECI in June.
The bidding process was cancelled at an advanced stage, owing to discrepancies noted in the bid submitted by Reliance NU BESS.
"It was discovered that as per the tender requirements, the endorsement of the bank guarantee against EMD (issued by a foreign bank), as submitted by the bidder, was fake. Since the above discrepancy was discovered subsequent to the e-reverse auction, SECI was constrained to annul the tendering process," the statement said.
Modus Operandi: 'Fake' Email ID
As part of the bidding process, the Reliance Power subsidiary had submitted a foreign bank guarantee in June this year, with a purported email from the State Bank of India supporting it, people familiar with the matter said.
The email had the following ID: 'sbi.17313@s-bi.co.in', the persons privy to the matter said. Finding the email suspicious, SECI initiated an investigation into the matter, they added.
Later, SBI clarified that they never issued any such support and that the email was sent from a fake email ID, the people noted.
According to a report in the Business Standard, Reliance NU BESS had blamed a third party arranger for the row over bank guarantee. However, no such third party is mentioned in the statement issued by SECI.
Parent Entity Faces Ire
Although the bid was submitted by Reliance NU BESS, the debarment action has also been taken against Reliance Power.
"The bidder, being a subsidiary of Reliance Power Ltd., had met the financial qualification requirements using the strength of its parent company. Upon detailed examination of the matter, it was found logical to conclude that all the commercial and strategic decisions undertaken by the Bidder were fundamentally driven by the parent company," SECI said.
Thus, it became imperative to also "debar the parent company, i.e. M/s Reliance Power Ltd. from participating in the future tenders issued by SECI", it added.
The debarment by SECI adds to the list of troubles faced by the Anil Ambani-led embattled Reliance Group. The conglomerate's financial prospects are considered to have been hurt by the insolvencies of Reliance Communications and Reliance Capital.
Recently, in August, the Securities and Exchanges Board of India barred Ambani from the securities market for five years and levied a Rs 25 crore penalty on him. While the Securities Appellate Tribunal stopped SEBI from collecting the penalty in October, the debarment from securities market continues. The SEBI order was in a case involving general purpose loans issued by Reliance Home Finance, a subsidiary of Reliance Capital.
Meanwhile, the shares of Reliance Power were trading in the positive territory on Thursday. At 2:46 p.m., the scrip was up 2.29% at Rs 44.59 apiece on the NSE, compared to a 1.22% decline in the benchmark Nifty 50.
