Delhi court on Thursday remanded former Reliance Power Chief Financial Officer Ashok Pal to judicial custody, marking a pivotal moment in the Enforcement Directorate's (ED) probe into an alleged ₹17,000 crore loan fraud that has ensnared the Anil Ambani-led ADA Group.

Pal, a longtime confidant of industrialist Anil Ambani and the first senior executive from the group to be arrested in this saga, was nabbed by the ED last week over his purported role in a dubious bank guarantee scheme. His initial custodial interrogation was extended until October 16, allowing investigators to grill him on intricate details of the fraud. The court has now reserved its final order on further extensions until October 18, leaving Pal behind bars as the case unfolds.

The controversy ignited from the August 1 arrest of Partha Sarathi Biswal, Managing Director of Odisha-based Biswal Tradelink, who stands accused of fabricating a phony bank guarantee. This forged document was allegedly submitted by a Reliance Power subsidiary to secure a lucrative tender from the Solar Energy Corporation of India (SECI), potentially unlocking massive solar project contracts. The ED alleges a web of collusion involving Ambani, select current and former group executives, and complicit bank officials, who purportedly manipulated guarantees to siphon off loans worth thousands of crores.

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In the wake of Pal's detention, Reliance Power moved swiftly to distance itself, announcing his immediate resignation as Executive Director and CFO. In a strongly worded statement, the company portrayed itself as an unwitting victim: "Reliance Power acted in good faith and is itself a victim of fraud, forgery, and cheating conspiracy." It clarified that the contentious bank guarantee was sourced through a third-party foreign bank, with no knowledge of irregularities on the company's or its subsidiaries' part. To maintain operational stability amid the turmoil, CEO Neeraj Parakh was appointed interim CFO.

As the investigation deepens, questions swirl around the broader implications for the debt-ridden Reliance ADA empire, already battered by years of financial headwinds. The ED's scrutiny could unearth more explosive revelations, testing the resilience of Ambani's business conglomerate and sparking renewed debates on corporate governance in India's power sector.

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