ED Seizes ₹54.8 Crore of Reliance Infrastructure Over Alleged Fund Diversion, Hawala Links

The Enforcement Directorate (ED) has seized assets worth Rs 54.82 crore belonging to Reliance Infrastructure Limited (R-Infra) under Section 37A of the Foreign Exchange Management Act (FEMA), marking a significant escalation in its probe into alleged fund diversion linked to highway development projects.

According to the agency, a Special Task Force based at its headquarters executed the seizure after freezing 13 bank accounts held by the company. The action stems from suspected violations under Section 4 of FEMA, which pertains to unauthorized foreign exchange dealings.

The ED’s investigation found that public funds allocated for National Highways Authority of India (NHAI) projects were allegedly siphoned off through a cluster of Special Purpose Vehicles operated by R-Infra. Officials said the diversion was masked as payments for sub-contracting work that, in reality, was routed to shell companies in Mumbai. These entities, the probe revealed, were set up using dummy directors and showed no legitimate business activity.

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The funds, once moved into these shell companies, were layered through additional fronts before being transferred abroad to the UAE. The remittances were outwardly shown as payments for importing polished and unpolished diamonds. However, no records or physical consignments were ever traced, indicating that the transactions were merely a façade for illicit outward transfers.

The ED further stated that the UAE-based beneficiaries maintained bank accounts not only in the Emirates but also in Hong Kong, and were linked to individuals operating illegal international hawala networks. The shell companies involved in the layering process have been connected to hawala transactions collectively exceeding ₹600 crore.

Investigators believe the alleged diversion left several R-Infra-linked project SPVs under severe financial strain. As cash flows thinned, bank loans tied to these projects reportedly slipped into the non-performing asset (NPA) category, resulting in losses for lenders and raising concerns about systemic risks to public funds.

The agency is expected to expand its probe to identify the beneficiaries, operatives and potential compliance failures that enabled the suspected transactions.