The order relates to foreign currency convertible bonds issued in 2006 and an overseas investment made in 2008 in a Singapore-based subsidiary, which the company said was made with all applicable approvals. The seizure primarily covers shares held by Reliance Power in Sasan Power, which have been pledged in favour of Power Finance Corporation Ltd (a Government of India undertaking) under security arrangements for more than 10 years, as well as certain bank balances.
Reliance Power said the seizure is provisional and subject to confirmation by the competent authority under Section 37A of the Foreign Exchange Management Act, 1999. The company is assessing the implications and disputes the allegations of a contravention of Section 4 of the Act.
The company said it is restrained from transferring, selling, pledging, encumbering or otherwise dealing with the seized assets. No penalty has been imposed.
"The company shall take all appropriate steps to safeguard its interest as well as the interests of all its shareholders and other stakeholders, as may be legally advised," it said.
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