(MENAFN- IANS) New Delhi, Oct 11 (IANS) The Enforcement Directorate (ED) has arrested Ashok Kumar Pal, Chief Financial Officer (CFO) at Reliance Power Ltd and a close aide of industrialist Anil Ambani, in connection with a fake bank guarantee case.

Pal's arrest came in connection with the money laundering investigation linked to the ADA Group. He was taken into custody after questioning at the central probe agency's Delhi office, and was scheduled to be produced before a judge.

The ADA case involves allegations of financial misconduct linked to Yes Bank and companies within the ADA Group, formerly headed by Anil Ambani.

ED had alleged that Anil Ambani and entities under the Reliance Group were involved in a Rs 17,000-crore loan fraud case.

Earlier this week, the Bombay High Court upheld the State Bank of India's (SBI) decision to classify the loan accounts of industrialist Anil Ambani and Reliance Communications as“fraud,” ruling that the bank's action was legally sound and well-reasoned, according to an order copy made available by the court on Tuesday.

A division bench of Justices Revati Mohite Dere and Neela Gokhale, on October 3, dismissed Ambani's petition challenging the SBI order. Anil Ambani had argued that the order was invalid as he was neither granted a personal hearing nor provided with all relevant documents.

The court, however, rejected this contention, observing that under the Reserve Bank of India's Master Directions-which govern such proceedings-the right given to borrowers is limited to submitting a written representation, and does not extend to a personal hearing.

The high court stated that Ambani's plea lacked merit and affirmed that SBI's classification of the accounts as fraud stood valid in law.

On June 13 this year, SBI tagged the loan accounts of Reliance Communications (RCom) and its promoter, Anil Ambani, as fraudulent. The bank cited diversion of funds, breach of covenants and related-party transactions as the reasons behind its decision, approaching the Central Bureau of Investigation (CBI) for action.

Another public sector lender, Bank of Baroda, had declared that the loan accounts of Reliance Communications Ltd (RCom) and its erstwhile director Anil Ambani had been categorised as“fraud”

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