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SEBI bars Anil Ambani, Rel Infra, RNRL and its four directors from markets

Anil Ambani and his group companies Rel Infra and RNRL settled a case of alleged violation of trading regulations with the market regulator by paying  Rs50 crore as settlement amount

In what appears to be the biggest settlement through a consent order, the Securities and Exchange Board of India (SEBI) has barred Anil Ambani, chairman of Anil Dhirubhai Ambani group (ADAG), and four of its directors from investing in the markets till December 2011. SEBI has also asked ADA group companies Reliance Infrastructure (RelInfra) and Reliance Natural Resources (RNRL), which has been merged with Reliance Power (RelPower), not to invest in the secondary markets-other than mutual funds-till December 2012. However, it said that the directives are not applicable to primary issuance, buybacks and open offers.

The market regulator, while accepting a settlement from the ADAG companies settled the case through consent after Anil Ambani, RelInfra, RNRL and its directors collectively paid Rs50 crore as the settlement amount.

In the consent order, SEBI said, ADAG chairman Anil Ambani, Rel Infra's vice-chairman Satish Seth, director SC Gupta, whole-time director Lalit Jalan and director JP Chalasani have remitted Rs25 crore, while RNRL and Anil Ambani have remitted Rs25 crore without admitting or denying the charges.

The case involves a probe into certain market "dealings" by the two ADAG companies, Rel Infra and RNRL. Both these companies along with some top group executives, including chairman Anil Ambani, were issued notices several times in the second half of 2010 to appear for personal hearing before the market regulator.

While SEBI, in its notice, did not clarify what "dealings" by RNRL and Rel Infra it was probing into, various agencies, including the Enforcement Directorate, have been investigating alleged irregularities in overseas debt instrument transactions by the two companies, way back in 2007.

Earlier in December 2009, Minister of State for Finance Namo Narain Meena told the Rajya Sabha that the Reserve Bank of India (RBI) has spotted end-use violations in two external commercial borrowing transactions of $360 million and $150 million, by RelInfra. The company invested the proceeds in debt mutual funds, pending declared end-use utilisation, in gross violation of existing guidelines, the minister said in a written reply in the Rajya Sabha.

Dr KM Abraham and Prashant Saran, both whole time directors of SEBI, in an order issued on Friday, also asked RNRL and RelInfra to implement a policy of rotation for their statutory auditors and not to re-appoint the same auditors for FY2011. SEBI said its order is without prejudice to its right to initiate enforcement actions, including reopening of the proceedings pending against the individual applicants and the companies, if any information provided by them is found to be untrue or the applicants breach any consent terms.

 

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COMMENTS

nagesh kini

6 years ago

citizenindia has painted a grim reality. Ratan Tata's statement proves
mera bharat mahan,
magar hum sab pareshan,
99% beimman !

citizenindia

6 years ago

boss, kiss duniya mein ho. life ban works only when they arent alive! ketan parikh is still active. all people who are banned still participate in the market. the front becomes someone else . there have been reports to this effect by various agencies. moneylife has also carried so many articles. if people like anil are allowed to continue like this, UNIT 64 is waiting to happen again. and india will have prime loan crisis as all of anil loands are considered prime. in a country where loans of ispat and kingfisher are not bad debts provisions, where anil and mallya kind of people get awards and fly pvt jets, people like kumar birla issue warrants repeatedly and then cancel, ratan tata calls india a banana repblic but doesnt mind free coal blocks and spectrum through bribes outsourced to pr firms, imagine what nuclear bomb we are sitting on! just remove the tata out of tata steel and read the cons b/sheet of tata steel. youd be scared! but thik hai, give money to the right people and ask lic to buy blocks . or ask some CM friend to allot land which you can pledge and take loans. Jiska koi nahi uska LIC hai na.

citizenindia

6 years ago

what i suspect is he will again try n manipulate his shares. why i say this is because he is in huge debt. you read his balance sheet and you will know. his rpowe plant is nowhere in sight. by the time he moves india would be power surplus. hisgas dreams are over, rcom is in the center of the 2g mess, he tried manipulating using gtl but failed. reliance insurance is facing problems. he is so desperate that he goes around announcing steel plants so that someone gives him iron ore and coal mines so that he can do what reddy brothers did! take mines for value addition but flaten the mines and nearby areas and earn thousands of crores! thats why he is now looking towards his elder brother. he is raju part 2 in making, my suspicion is he may be tempted to divert mutual fund money to rig his stocks. he is the only person in the world who was allowed to give bonus shares to non promoters. what he did was emotionally fool shareholders by trying to project himself as the good samaritan. one of them being by neighbour!

Retail Investor

6 years ago

An intentional financial act to misuse the fund was exposed and hence covered up with 50Cr. No body will pay 50Cr 'just like that' unless at fault.

What is the source of 50Cr no body knows , where were the funds used, nobody knows. Is Mr.Anil getting desperate to come out of sick companies either way ... fair or unfair. Sounds spooky to me. I have been an Anil fan since years .. but now loosing confidence as all the companies in ADAG are the turning are turing RED and bleeding . I wish they would have never split at least the companies were in good health then, or may be now they are in honest hands and showing correct pictures unlike earlier .. I am heck of confused with these two bros ....

Rajan Manchanda

6 years ago

Mr.Anil Ambani has operations spread Nationwide and Overseas. The business is very complex and it is possible that a technical default too can take place.SEBI has provided the option of a settelment. Many Companies have gone in for settelment ...... so why the fuss about Anil Ambani ?

Mr.Ambani has chosen to go for a settelment rather than going in for a prolonged legal battle which would be time consuming and expensive too. It makes business sense to focus on one's business . The stock markets have already over reacted on his stocks. The Companies have not paid any amount. This penalty payment would ensure he sets his house in order.

The media has widely covered the SEBI settelment and SEBI too has closed the issue. It would be best to let him carry on with his business instead of hounding him day after day.
He has very well clarified the issue in his press meet on December 16, 2011

REPLY

R N sing

In Reply to Rajan Manchanda 6 years ago

Mr Manchanda, aren't you the same person who just got Rs one crore from Kotak because of Moneylife?

You should be happy they speak the truth. If they believed that Anil Ambani or his companies gave up Rs 50 crore out of love and affection for SEBI and without bargaining really hard to avoid the payment, you still haven't learnt how the system works.
Why are you posting this pro ambani stuff?
Couldn't one argue that one manchanda was foolish and allowed kotak to cheat him, why take up the case? let him try and earn it back by some hard work.

isnt that a fair thing to ask?

Rajan Manchanda

In Reply to R N sing 6 years ago

Gentleman

Who is disputing that Money Life is not speaking the truth ??? Money life is reporting the news for it's readers. Money life has not passed any comments on this " Anil Ambani " episode.

Money Life has given this effective platform for expressing one's views. I have posted on this site the effective and important role played by Money Life in my issue and expressed my gratitude. How come you are making such absurd remarks.

you have your opinion which you are free to express on the Anil Ambani case. Is every body bound to have the same views ? If a financial impropriety been commited they have been fined by the regulator. The markets have hammered the group stocks bringing down the market cap by Rs.6500 crores in one single day. What else do you expect ?

The Anil Ambani group has 11 million share holders .They directly and indirectly provide employment to lakhs of people. They generate wealth for the country for their share holders and for themselves. Through mobile telephony they have linked the Remotest villages with the Cities. They are building power projects to take care of critical power requirements.They are building sea links, expressways, metro's creating world class infrastructure. If you run such a vast business empire chances are that you may make mistakes. The same rule / regulation can be interpreted differently by different people.

Want to play safe ? dont do business just put your money in Fixed deposit. Do nothing and you will break no rules.

One must learn to appriciate " THE NATION BUILDERS. "

Anil

6 years ago

@Mansi and Mangal....do not try to flood the article with your silly comments. We know for sure that you are one and the same person posing comments using Reliance network.

Mansi

6 years ago

This has been hyped by unnecessarily. The companies will not be affected in any way. Nobody has accepted or denied the charges. Only the fine has been paid because Sebi has levied it.

REPLY

arvind M

In Reply to Mansi 6 years ago

Hey Mansi.
scroll down and check question about sonata and Indage. Since you are clearly ADAG sorry Reliance PR .. answer that one for us

Mangal

6 years ago

Why do people spread such rumours Even times of india says that the companies are not affected in any way , becuaes the directos ahve paid the fine themselves. reliance infra and R power are not involved in this mess. they are financially strong compnies and investors can rest assured their investment is safe.

REPLY

shruti varma

In Reply to Mangal 6 years ago

Wow, the Ambani PR machine is at work. Rs 50 crore is small change? What is the rumour here? And i do hope Income Tax checks the source of payment and ensures that Mangal Pandey here is correct -- it must be paid out of the personal pockets of the directors! Mangal, do report and tell us

Farheen

6 years ago

Anil Ambani and his companies not banned by SEBI - official consent order from Reliance Infrastructure Ltd. http://www.slideshare.net/santravi8/anil...

REPLY

Anil

In Reply to Farheen 6 years ago

Dear Farheen..dont fool people, we know you work for ADAG. Here is the "real" consent order from SEBI..
http://125.18.26.195/consentorders/relin...

Farheen

In Reply to Anil 6 years ago

hey Anil, the link posted by me is just a simpler version & was released to the press and is in the records... both the consent orders are the same...

nagesh kini

6 years ago

I'm inclined to agree with Bharat Gandhi on ADAG deciding on the terms of settlement.
The offense is in deed so very serious, there ought to have been no "settlement" of any sort, but warrant a stiff penalty - the maximum laid out by the law. This 'settlement' allows them with blue murder - a serious economic crime!

bharat gandhi

6 years ago

the worse fallout of this case will b that as they say in hindi "sebi ka pet bada ho jayega". if they can extort 50 crores from adag then smaller companies will also have to pay huge fines/bribes. till not smaller cos. used to pay small bribes/penalties n get away with it. and if sebi starts getting crores then the salary of the guys (hardly) working will get multi crores salary. this 50 crores should have gone to govt tax dept and not to sebi or nse. and by the way the terms of settlement were decided by adag not sebi.

KRUPAL

6 years ago

No amount of penalty or penal actions, punishments will resolve the problems of the Stock markets, unless the INVESTOR is well educated in financial dealings and he develops immunity to the greed and fear. So long as he is greedy and looks for money making in unreasonable speed & methods, he will be putting his wealth into risk. When management of a company, of Reliance standard, can do such misdeeds one can imagine the deeds of smaller companies. Everybody looks at money making easy way. The goal is good but the means through which thery are trying to achieve this should also be good. Now a days share market investment interest is percolated in to the rural area. Rural and small town population is showing keen interest in this market. They are investing with illusion of faster money making. They are not aware about the money melting in the market. Basics such as obtaining contract note and collection of statement of account is also not known. INVESTOR EDUCATION and EFEP equation is only solution to protect and grow the investment.
EFEP IS ENTRY ON FUNDAMENTALS AND EXIT FOR PROFIT with out reasons attachment.

Angelo Extross

6 years ago

Why have they remitted Rs. 50 crores without admitting or denying the charges. Commensense tells that one remits (quote "pays") when one has broken the law, or when one is under extortion. What is the truth here?
Is SEBI an extortionist?

Rajan Manchanda

6 years ago

SEBI will be able to collect Hundreds of Crores of Rupees by way of fines every year and yet cleanse the system to some extent.

Rajan Manchanda

6 years ago

SEBI should use Rs.Fifty Crores collected as fine towards a " Corpus Fund " to cleanse the stock market manipulators , PMS and Private Equity Fund sponserers who dupe investors, Ulip scamsters and promoters who rig IPO's and take investors for a ride.

The fund should be used for Whistleblowers who should be highly rewarded and motivated by SEBI.

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