SECI Bars Anil Ambani's Reliance Power For Three Years
Solar Energy Corporation of India Ltd. has barred Anil Ambani's Reliance Power Ltd. and its subsidiaries from bidding in future tenders for three years.
Solar Energy Corporation of India Ltd. has barred Anil Ambani's Reliance Power Ltd. and its subsidiaries from bidding in future tenders for three years after it was found to have submitted fake bank guarantees.
The debarment is due to fake bank guarantees submitted in the last round of bidding, SECI said in a statement on Thursday.
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 Government of India enterprise 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."
Later in the day, Reliance Power said it will legally challenge SECI's decision, calling it "unwarranted action". The company said it has been a victim of fraud, forgery and criminal conspiracy and had filed a case with the Delhi Police in October.
The Story So Far
SECI invited bids as part of its tender process for a 1 gigawatt solar power and 2 gigawatt standalone battery energy storage system, back in June. The bidding process was then cancelled at an advanced stage, owing to discrepancies noted in the bid submitted by Reliance NU BESS Ltd, a subsidiary of Reliance Power.
As part of the process the Reliance Power subsidiary had submitted a foreign bank guarantee in June this year with an email from State Bank of India supporting it, with the email address 'sbi.17313@s-bi.co.in', according to sources.
Finding the email suspicious, SECI initiated an investigation into the matter. SBI later clarified that they never issued any such support and that the email was sent from a fake email address.
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.
The debarment by SECI is one among the many issues being faced by Anil Ambani's Reliance Group.
In August, the Securities and Exchanges Board of India had 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.
The Anil Ambani conglomerate also invested heavily in purchasing stressed Pipavav Shipyard in 2016, which was then rechristened to Reliance Naval & Engineering. However, the group could not affect a turnaround and eventually the lenders had to sell the shipyard under the Insolvency & Bankruptcy Code.
Apart from this, the insolvencies of Reliance Communications and Reliance Capital further hurt financial prospects of the group.