Reliance Power: Thursday brought bad news for the investors of Anil Ambani’s company Reliance Power in the stock market. Shares of the company saw a decline of over 5 percent after a major crackdown by the Enforcement Directorate (ED). While investigating under the FEMA Act, ED related to Reliance Power Rs. 2,032.81 crore assets have been seized. The seizure was made under an order issued on October 12. The seized assets include bank accounts of Reliance Power and the company’s stake in Sasan Power Limited. Panic spread in the market as soon as this news came out.

The real reason for this major action of ED

According to a PTI report, this whole matter is very old. The investigation was initiated by SEBI’s action. SEBI has placed in the books of Reliance Power Rs. Questions were raised regarding the write-off of 2,101.46 crore. The money was invested in companies in British Virgin Islands (BVI) and Cayman Islands.

ED’s lines of inquiry date back to 2006. At that time Reliance Natural Resources Limited (RNRL) had raised $300 million through foreign bonds. Later this company merged with Reliance Power. Of the money raised, $275 million was invested in the Singapore subsidiary. The money was then deposited in the Deutsche Bank in Geneva. The investigating agency says that this deposited money was used as a guarantee to get loans to foreign companies. All these companies were being run from India at the behest of Reliance Anil Ambani Group.

Accused of embezzlement of money through forged documents

The ED investigation has come up with many shocking revelations. The agency alleged that the loan money was used by foreign companies from Mauritius for round-tripping to India. This benefited the group when the real money was kept abroad. Matters worsened when British Virgin Islands companies defaulted on Deutsche Bank loans. The ED claims that fake documents were created to hide the entire fraud. These documents sought to show that the money given to foreign companies was for legitimate business.

Company’s stand on this entire controversy

After such a big action, Reliance Power has also given a clarification from its side. In a disclosure to the stock market, the company has said that it completely denies all these allegations of the ED. The company says it is taking legal counsel to protect the interests of its investors. All necessary legal steps will be taken in the near future.

How are the stocks in the stock market?

This controversy has had a direct impact on the company’s stock. On Thursday, shares of Reliance Power on the BSE traded at Rs. Opened at 19.68. During the day’s trading it was Rs. 19.84 but later fell to Rs. It reached 18.80.

Market experts believe that Reliance Power shares are currently in a continuous downward trend. According to Rajesh Bhosale, technical analyst at My Advisor Alpha, whenever a stock goes up a bit, people start selling it. It has fixed the next support of the stock at Rs 17.50. Meanwhile, Virat Jagad, senior analyst at Bonanza, says the stock is trading below its all-important moving averages. Technically it looks quite weak. If the stock has to back up, it will have to cross the Rs 21.50 level. If it is Rs. If it slips below 19, investors may suffer more losses.