EOW books Shanghai Electric officials for cheating, forgery after R-Infra’s complaint

“We have registered a case against unknown officials of Shanghai Electric Group and other unknown people under sections 420 (cheating), 465 (forgery), 467 (forgery of valuable security, will, etc), 468 (forgery for cheating), 471 (using a forged document as genuine) and 120B (criminal conspiracy) of the Indian Penal Code (IPC),” said an EOW officer. The IPC sections have been invoked as the acts in question took place in 2023, before India’s new criminal law, the Bharatiya Nyaya Sanhita, came into force on July 1.

According to the FIR registered with the Vakola police station, between June 2008 and September 2020, Shanghai Electric allegedly made fake guarantee letters of Reliance Infrastructure for the Sasan Ultra Mega Power Plant in Madhya Pradesh and Butibori Power Plant in Nagpur.

The company allegedly also forged the signatures of R-Infra’s then vice-president, Rajesh Agarwal, and submitted the letter to the Singapore International Arbitration Centre, where a claim of Shanghai Electric for $140 million ( ₹1,200 crore) was pending. R-Infra alleged that the Chinese company used the forged and fabricated documents in the arbitration proceedings and, thus, cheated it, said the EOW officer.

The complaint was filed by Neeraj Parakh, senior executive vice-president (commercial) at Reliance Infrastructure. In 2008, Sasan Power, a subsidiary of Reliance Infra, started building a power project in Sasan village in the Singrauli district of Madhya Pradesh. Another subsidiary, Vidharbha Industries Power, started work at the Butibori power plant.

The companies had given the contract for equipment supply, erection, construction and service to Reliance Infra Projects (UK) Limited, which was later renamed Oxagon Enterprises. The Birmingham-headquartered company had sub-contracted the work to Shanghai Electric.

Accordingly, Shanghai Electric supplied the boilers, turbines and generators for the projects from 2008 to 2015. However, the subsidiary companies eventually complained to Shanghai Electric that the products were defective. They then didn’t pay Reliance Infra Projects (UK) and Shanghai Electric for the service. The Chinese company then approached the Singapore International Arbitration Centre with documents, including a letter of guarantee stating that Reliance Infra’s predecessor, Reliance Energy, would pay the bills if the subsidiaries didn’t, said a police officer.

The complaint claimed that neither the board of Reliance Energy had given any powers to Rajesh Agarwal, nor had he taken permission from the Reserve Bank of India for issuing the letters. “Rajesh told us that he had not given any such letter. A writing expert also confirmed that it was not his signature. As Rajesh was working with some other firm, he approached us now,” said the EOW officer.

In March 2024, the Delhi high court had restrained Anil Ambani from selling from selling assets worth $135 million. Shanghai Electric had filed an appeal against a 2022 order by a single-judge bench that denied its request for temporary relief to obtain over ₹1,200 crore from Reliance Infrastructure that Shanghai Electric claimed and should have paid in an arbitration dispute.