SEBI denies Anil Ambani’s settlement request, cites misuse of $700 million company funds

New Delhi, June, 26
Industrialist Anil Ambani and his corporate group’s attempts to resolve accusations of the improper use of USD 700 million of the company’s funds were denied by the financial markets regulator Securities and Exchange Board of India (SEBI) on Friday.
According to the filings, the SEBI denied the requests last week about accusations that Ambani and Reliance Infrastructure inappropriately routed Rs 6,526 crore (USD 691 million) to organisations connected to controlling shareholder Ambani.
Over the past 18 months, Ambani, the younger brother of billionaire Mukesh Ambani, has come under increasing scrutiny from law enforcement and regulatory bodies.
Some of Anil Ambani’s properties have been frozen, and many group executives have been detained on suspicion of fraud. The cases are still pending in court, and the executives have denied any wrongdoing.
According to the documents, Sebi claimed in September that the transactions involving Ambani and Reliance Infrastructure constituted a “mis-utilisation of company funds” since they might have been carried out for personal gain rather than for the benefit of the company’s shareholders.
In the meantime, an email from a representative of the Anil Ambani organisation stated: “The allegations are categorically denied. The matters are sub judice, and the Group will continue to defend its position as legally advised.”
The specific accusations and the regulator’s denial of the settlement requests have not been made public previously.
Without providing specifics, Reliance Infrastructure stated in an October exchange filing that Sebi had accused it of breaking regulations regarding its financial exposure to a related firm.
According to documents, Sebi rejected the settlement petitions citing ongoing investigations by other Indian enforcement agencies, including India’s financial crime and fraud investigative agency.
This is Ambani’s second settlement refusal. His request to resolve accusations in a dispute involving investments in India’s Yes Bank was turned down by Sebi last year.
Under Sebi’s settlement procedure, a company may settle a matter by paying a fine without acknowledging any wrongdoing.
Sebi usually issues an extensive public order detailing the alleged violations in the event that it rejects a settlement.
The ramifications of this order might range from financial fines to limitations on access to the capital markets. Such orders may be appealed in court by companies and other bodies.
With board approval to raise up to Rs 30 billion from the public, Reliance Infrastructure is looking to engage the markets for what it claims is an essential fund-raising.