At Least 122 Companies of Anil Ambani Group with Little or No Business Have the Same Address
While prime minister (PM) Narendra Modi has made it his mission to eliminate lakhs of shell companies, isn’t it stunning that the Anil Dhirubhai Ambani (ADA) group has over 120 companies with a similar addresses of Santa Cruz (East) Mumbai reveals ZaubaCorp (https://www.zaubacorp.com/company/RELIANCE-DEFENCE-LIMITED/U74999MH2015PLC263178)
 
A simple search on ZaubaCorp reveals over 122 companies sharing the same address, "502, Plot no. 91/94, Prabhat Colony Santa Cruz (East) Mumbai City MH 400055 IN". 
 
All these companies, like Reliance Aerostructure Ltd, Reliance Helicopters Ltd, Reliance Defence Systems & Tech Ltd, Reliance Defence Infrastructure Ltd, Reliance Naval Systems Ltd, Reliance Unmanned Systems Ltd, which share this address are part of the Reliance ADA group.
 
According to ZaubaCorp, almost all companies that have a common address also share same email ID for contact, [email protected] or [email protected] 
 
 
One of the companies, Reliance Defence, has two directors, Lalit Jalan and Sateesh Seth, as per ZaubaCorp. Both are key confidantes of Anil Ambani and are directors of several Reliance ADA group companies. 
 
 
For example, Mr Jalan is shown as associated with Reliance Defence Systems Pvt Ltd, Reliance SED Ltd, Reliance Defence and Aerospace Pvt Ltd, and Reliance Velocity Ltd as director. He is also shown as a nominee director on BSES Yamuna Power Ltd and BSES Rajdhani Power Ltd. 
 
Mr Seth, as per ZaubaCorp, is associated with Reliance Power Ltd, Reliance Infrastructure Ltd, Reliance Telecom Ltd, Reliance Anil Dhirubhai Ambani Group Ltd, Reliance Internet Services Ltd, as director, among other companies. He is also nominee director on Mumbai Metro One Pvt Ltd, appointed on 20 April 2018. He is a well-known confidant of Mr Ambani and stands to face a jail term in the Ericsson case, if the group fails to pay over Rs453 crore as per Supreme Court orders. 
 
The previous directors of Reliance Defence were Mr Ambani himself and Anthony Jesudasan, an influential lobbyist and media relations person based in Delhi who has been associated with the Reliance group for three decades. 
 
After brothers, Mukesh and Anil, Ambani split their businesses, Mr Jesudasan moved over to ADA group as a key aide to the junior Ambani. Both of them stepped down from Reliance Defence on 3 October 2018.
 
 
The directors of other companies that share the address with Reliance Defence are also associated with other ADA group companies. For example, Reliance Aerostructure has Rajesh Kamal Bagga as its director. He is also associated with nine other companies as director including Reliance Unmanned Systems Ltd, Reliance Naval Systems Ltd, Reliance Defence Technologies Pvt Ltd, and Reliance Defence Infrastructure Ltd.
 
Interestingly, most of these companies have a paid-up capital of Rs1 lakh and less than 10 employees.
 
In a supreme irony, while the group is weighed down by debt and is battling to salvage some value from its sprawling empire, many of these companies have AAA in their names such as AAA Resources P Ltd, AAA Infoservices P Ltd, AAA Cinecreation Services P Ltd and so on—as though to suggest a high rating! 
 
Another interesting aspect is the large number of companies with arms and armaments in their names such as Reliance Ammunition Pt Ltd, Reliance Armaments P Ltd. There is even a Dassault Reliance Aerospace P Ltd. Dassault is the manufacturer of the controversial Rafale aircraft, where ADAG’s involvement has turned highly controversial. 
 
We have sent an email to Reliance ADA group about the presence of so many companies of the group using same address. Till writing this story, we have not received any reply from them. We will update this story as and when we receive any reply from Reliance ADA group.
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COMMENTS

Mahesh S Bhatt

3 weeks ago

Mukesh Ambani has 196 companies Mahesh

Gupta

4 weeks ago

While we know what ADAG group is (and now the whole world knows!), it is unclear what is the purpose of this article or why the writers are so "stunned" by this simple fact. To you question in the first line "isn't it stunning... ".. I don't think anything is stunning about ADAG having 120 companies with the same address... its not too much for a group of their size (they may be bankrupt, but they are "BIG" in bankruptcy also... hahaha... maybe they don't have money for 120 buildings, so all offices are in same place!... but what is the criminal aspect of this that you are trying to highlight???? For heaven's sake, you ML guys must stop being paranoid about every damn thing in the world. I seriously don't understand how you come to the conclusion that these companies are money laundering or shell companies.. you don't say so, but that seems to be the essence of this article... the first line says it all... while the PM has made it a mission to eliminate shell companies..... was that what you wanted to make fun of??? Maybe these are shell companies, maybe the big idiot that Modi is he missed 120 companies in India, but that make it bad to have shut down 200000 other shell companies... Get a life, Moneylife !!

REPLY

K V RAO

In Reply to Gupta 3 weeks ago

Please don't use the word"idiot" to the nation's head. Your writing is so powerful OMG anyone who is fanciful of English language would simply admire. Only thing is I am bit disappointed (of course it doesn't matter for your) when you bring our PM into the circle of discussion

Gupta

In Reply to K V RAO 3 weeks ago

Thank you for your kind words... the reference to PM is because the opening line in the article brings in the PM's drive against the shell companies into the discussion unnecessarily. I know by reading ML for past few years that ML hates him and hence the negative sarcastic reference as idiot is also from their perspective as they found one more reason to criticize him. I personally am his supporter though I do feel in equal measure that he is far from perfect and is doing many wrong things. But he is also doing lots of good things and MOST importantly, it is a relative assessment, not absolute and he is anyday far superior to any crooked corrupt Congressi. Even comparing him with Congressis is sacrilege.... agree with your feedback on language though..

K V RAO

In Reply to Gupta 3 weeks ago

Gupta's remarks are fantastic. I simply envy Guptaji for his ability to put such a knowledgeable contents and beautiful language. I request Guptaji to keep us in such a delighted mind (that we get immediately after reading)for all the features put out by Moneylife.

One special personsl request: my email id [email protected] Please send copy of your blogs/remarks or any writings on business issues to me.

Cheruthon Ninan

In Reply to Gupta 3 weeks ago

fully agree. Just because you have a pen and no proof of anything, you cannot write anything and everything in public domain. Have you done any research if they have done any illegal activities. This is called fake news or fabricated news.

Fully agree with mr.gupta

Charan Rawat

4 weeks ago

Having multiple companies at a same address is not CRIMINAL. Just check Bombay House or Industry House or 9 RN Mukherjee Road, Kolkata it 9 Mangoe Lane or Parry’s Corner in Chennai. All corporate houses have multiple entities - and a very large number being dormant companies or just holding some piece of real estate that’s let’s out to main entities.

So don’t get worked up simply because there are many companies registered at same address. It’s abuse of companies for criminal activities that’s a cause of concern.

Praveen Sakhuja

4 weeks ago

without gong into details of the publication, one simple question IS/WAS government not aware of these listed Companies???? If yes what action has been intiated to have bogus companies who do not transit? If No is it not failure of governrnent to put a check on such long list of companies to exists without any bussiness. Shame our government bother for donations supported by promotions.

Amit Sunil Achhpal

4 weeks ago

Most of these would be SPV's, you guys mustn't sensationalize anything & everything related to Mr.Anil Ambani. Ex - I'm sure a company like Reliance Power or Reliance infra may have over 20 cos as potential SPV's, does that mean they are all shell? Let's make sense folks..
Don't be "ARVIND KEJRIWAL" of the business world.
Cheer's!

REPLY

MODELEXAM

In Reply to Amit Sunil Achhpal 4 weeks ago

Calm down! there is no blame or accusation on ambani in this article. they have just presented the facts here. On seeing these many SPV's , one might wonder if there will be any PURPOSE (forget Special Purpose!) to these companies at all considering the current pathetic scenario of the group!

Prashant Chandanapurkar

In Reply to MODELEXAM 4 weeks ago

True even Vadra have so many shell companies. So what? Nothing wrong with that!

PM

In Reply to Amit Sunil Achhpal 4 weeks ago

Well put!

Savitha KL

4 weeks ago

No taxes are applicable for Mr Ambani?

Deepak Narain

4 weeks ago

How can one individual have so much? What are these multifarious companies doing? Certainly, there is something fishy!

Does SEBI Have Its 'Eyes Wide Shut'? Anil Ambani Share Saga
One 11 February 2019, three entities of the Anil Ambani group wrote a letter to Ajay Tyagi, chairman of the Securities and Exchange Board of India (SEBI), demanding an investigation into the decision by Edelweiss group to sell shares of Reliance Power Limited (RPL) that were pledged with it causing a sharp drop in prices. The Anil Dhirubhai Ambani group (ADAG) also wanted “A ban on all Edelweiss Group entities to be declared ‘not fit and proper’ and impose a ban on each of them in the capital market in addition to financial penalties.”
 
Today (20th February), with the Supreme Court holding Reliance Communication Ltd (RCom) and two ADAG  companies guilty of contempt of court, the ADAG letter to the SEBI chairman takes on a whole new colour. 
 
One may ask if Reliance ADAG is still ‘fit and proper’ to be in charge of investment, finance and insurance-related companies that handle large public funds. The answer to this question impacts millions of investors of mutual funds (MFs) whose schemes have chosen to lend to Reliance ADAG  companies and needs an urgent clarification by the regulator. 
 
I sent a message to the SEBI chairman asking how ADAG remains ‘fit and proper’ to be controlling sensitive entities mentioned above and the implications of the ‘standstill’ agreement signed with lenders on 18th February. I have received no response.
 
Let’s look at what happened in Court today and its implications for lenders and MFs that have invested in the Reliance ADAG companies. 
 
The apex court has held three companies of ADAG guilty of contempt and ‘wilful disobedience’ of its orders; the Court has ordered it to pay Rs453 crore with interest to Ericsson India. This is in accordance with a commitment made to the Court in October 2018. The money has to be paid within four weeks, failing which the chairman of the three telecom companies face a jail term. The apex court also imposed a penalty of Rs1 crore each on three directors. It also asked for the release of Rs118 crore previously deposited by ADAG with the Court to Ericsson India. 
 
Impact on Stocks
The judgement, naturally, had a negative impact on Reliance ADAG companies’stocks whose prices crashed immediately after the judgement to recover sharply at closing. Reliance Capital fell 10.26% but recovered to close 4.26% lower at Rs145.05; Reliance Infrastructure fell 2.29% to close at Rs 119.40. These are the only two companies that still have some significant value. 
 
Reliance Communications (RCom) fell 9.46% to Rs5.45 and then recovered to close at Rs5.80; Reliance Naval and Engineering dropped 8.56% to Rs8.22 and then recovered to close just 3.56% higher at Rs8.67, Reliance Power slipped 5.53% to Rs10.25 but went up to close just 0.92% lower at Rs10.75; and Reliance Home Finance dropped 4.26% to 24.70 and closed down 3.49% at 24.90. 
 
Standstill Conundrum
Notice how several of ADAG companies’ shares are already at such a low that there is not much room for them to tumble further. But we know that Edelweiss group, L&F Finance and several others have lent to the group against the pledge of promoters’ shares. 
 
Worse, after the big fracas over the fire-sale of Reliance Power shares by Edelweiss group and L&T Finance, 90% of the lenders entered into an in-principle ‘stand still’ agreement not to sell anymore shares until September 2019. 
 
This agreement was a similar to the irregular deal of the Zee/Essel group. Since the regulator gave that deal a tacit okay by remaining silent, it has perforce remained mute on this one too. However, as is obvious from the share prices of the ADAG companies, the risks involved are vastly different. 
 
That is not the only problem. 
 
Extent of Pledge 
Does SEBI even know how many shares are pledged by the Reliance ADAG companies? Or, what is the exposure of the entire MF industry to this group? MFs, which hard-sold their schemes under the banner of ‘mutual funds sahi hai’, causing assets under management to zoom, have a huge fiduciary responsibility today. Are they fulfilling it?
 
A source pointed us to mandatory disclosures to stock exchanges and others which indicate that the Reliance ADAG has probably pledged almost its entire holding of shares. On 8th February, Reliance Capital disclosed a pledge of another 2.1 crore shares by which 89.84% of the total promoter holding is encumbered. 
 
On 16th February, Reliance Infrastructure pledged another 1.5 crore shares taking the pledge of promoter holding to 95.09%; on 17th February, Reliance Power pledged 2.5 crore shares taking pledged promoter holding to 95.5%.  
 
The disclosures indicate that the three companies provided additional collateral to the lenders just ahead of the ‘standstill’ agreement. But how relevant is the pledge when share prices are collapsing? And should ADAG even remain in control of some of these companies?
 
Isn’t it a breach of the lenders’ fiduciary responsibility not to do everything possible to safeguard (or in this case salvage) the value of their investment? Remember, Reliance Communications has already filed for bankruptcy and any money that can be raised by the group through sale of assets or otherwise will have to be paid to Ericsson India if Mr Ambani and his top executives want to stay out of jail. 
 
In a media statement, the ADAG group had said that it has agreed to place 30% of its holding with a strategic investor and this would help payback 65% of the borrowing based on prices before the crash. 
 
But there is a big question mark both on ADAG’s ability to find a buyer for the 30% and the price at which the deal would be struck, especially after the latest Supreme Court ruling and the further fall in stock prices. When I asked a spokesperson for the group, I was told: “No lenders to the promoter group who had entered into a standstill agreement have sold shares today.” 
 
There are nine lenders involved in this deal. These include: Templeton Mutual Fund, DHFL Primamerica Mutual Fund, Indiabulls Mutual Fund, IndusInd Bank and Yes Bank. Wouldn’t they have failed in their fiduciary duty to investors if the stock prices drop further and they have to take a loss?
 
Remember, stock prices of the ADAG companies have been in a free fall for the past several months because the bad news emanating from the group doesn’t seem to end. First, the controversy over its role in the Rafale deal; then the failed deal with Mukesh Ambani leading to RCom filing for bankruptcy; the controversial defamation case; failure to report a default in interest payment on non-convertible debentures way back in 2017 (settled by paying Rs62 lakh to SEBI); a failed attempt to stop the sale of pledged shares; and, now, the most serious of all, being held guilty of contempt and wilful disobedience by the Supreme Court. 
 
The value of ADAG companies has plunged 61% since September last year and 42% since January 2019. Its total market-capitalisation stands at less than half the debt of RCom alone, reports The Hindu. The question then is: Will the regulator keep its eyes widely shut with regard to the irregular agreement by 90% of lenders in breach of their fiduciary duty and will it clarify the application of its ‘fit and proper’ criteria in the context of the ADAG companies?
 
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COMMENTS

mayur ranjan

4 weeks ago

What about his several companies under the brand name BIG e.g. Big Entertainment , Big Cinemas Big FM. I guess all these are already small by all standard.

shivkumar

4 weeks ago

As usual Sucheta and Moneylife have been the first ones to raise some inconvenient but very pertinent questions. Will SEBI wake up and smell coffee.

Samir Nare

4 weeks ago

Madam, You missed covering the PSU banks exposure to ADAG group companies......RCOM stands at a mind boggling debt of 40,000 Crores...they are not paying Erricson 500 Crores...how are they going to repay 40,000 Crores which they own to pvt and psu bank !!! Also their is no news about progress of Essar Ruia's paying back the debt.

Sudhakar Ojha

4 weeks ago

Older people were gradually increasing percentage of investment in debt funds to reduce risk. Seems we were wrong and sticking to equity funds was safer or is that too a mirage ?

The framework itself bends to accommodate instead of being sacrosanct.

REPLY

SURAJIT SOM

In Reply to Sudhakar Ojha 4 weeks ago

In a growing economy ,equity should perform better than debt fund. A healthy equity market is good for a country's economy. This point is hardly discussed . That is why auditors, regulatory authorities need to reign in rogue elements so
that market functions in a decent way. But instead they seem to be hand-in-glove with the criminal elements. Otherwise how scam like IL & FS does take place ?

dv

4 weeks ago

Nobody in government questions any of the regulators. The regulators therefore do not do their job - at least not SEBI & IRDA. Historically, they have bungled their lines and in spite of your persistent spoon feeding, they do nothing. Someone must be getting paid there.

K V RAO

4 weeks ago

MFs wash their hands through a clause "Investments are subject to market risks". Unfortunately, investors ignore the warning, and go ahead. Here we have to evaluate which MF house has maximum investment to ADAG group. That speaks about their quality of due diligence. Accordingly, investors can shortlist MF houses on a scale of 1 to 10.

SURAJIT SOM

4 weeks ago

We may see Satyam or IL&FS like collapse in ADAG companies. It will be bad for AA himself ,not to talk of the shareholders. They have lost almost everything already.

Aditya G

4 weeks ago

Totally off-topic: I liked that movie, even though it was royally panned.

Coming back to the topic: SEBI needs to pull up its socks. Seriously. It's failing as an institution (or has it failed already?) I'm losing faith in it. SEBI is not only making it difficult for consumers to protect themselves but also harder for small intermediaries (read: fiduciaries) to do business. I don't know but I feel this way. Their lackadaisical attitude towards everything bothers me. I hope I'll be proved wrong.

Vaibhav Dhoka

4 weeks ago

As I have been telling that our regulators always are most lenient to brokers, AMC'S, exchanges and other entities for which it should act as watch dog but these regulators never act in the interest of investors whose interest they should have utmost care, but SEBI always failed to take due diligent action, on the contrary they make and prescribe such regulations wherein individual entities like IFA'S and petty investors are harassed. In short it is common man who is always on receiving end.

Savitha KL

4 weeks ago

There are rumours that EPFO and EPS have been invested in Reliance group companies of insurance, please clarify if true

Aqeel Qureshi

4 weeks ago

What's the hue and cry bout?
It was just today that I came across a billboard saying 'Mutual Funds Investment mein Patience Rakhna Padta Hai'
Have patience please! (pun intended)

All this hanky panky Mutual Fund shadow banking industry. The whole pack is partner in crime for each other. Investor interest?? What's that?
Remember the ICICI Securities IPO matter? You scratch my back and I shall yours.....

And we say just the PSU guys are corrupt......

AAR

4 weeks ago

Good point raised. ADAG is not fit to handle Insurance or Mutual Funds. Regulator should appoint a Special body to take care of public funds being handled by ADAG.

SC holds Anil Ambani and Two Directors Guilty of Contempt, Orders To Pay Rs453 Crore to Ericsson within 4 Weeks
The Supreme Court on Wednesday held Reliance Communication Ltd (RCom) chairman Anil Ambani and two directors of the group companies guilty of contempt of court. While directing Reliance Anil Dhirubhai Ambani group (ADAG) to pay Rs453 crore along with interest to Ericsson within four weeks, the apex court had also imposed a fine of Rs1 crore each on three companies of ADA group (ADAG).
 
This case was related with a contempt plea filed by Ericsson India over its pending dues of Rs550 crore from ADAG.
 
A two-judge bench comprising Justices Rohinton F Nariman and Vineet Saran also asked Reliance ADAG to purge contempt by paying Rs453 crore with interest to Ericsson within four weeks. If not paid, three months' jail term will follow, the bench said.
 
The bench directed the Court's registry to give Ericsson Rs118 crore that were earlier deposited by RCom. The apex court said the entire amount that RCom has to pay to Ericsson is Rs550 crore plus the interest that was generated.
 
The Court also imposed a fine of Rs1 crore each on RCom, Reliance Telecommunication and Reliance Infratel that would be deposited with the Supreme Court Legal Services Committee (SCLSC).

The two directors held guilty of contempt of the court are: Reliance Telecom chairman Satish Seth and Reliance Infratel chairperson Chhaya Virani. In case of default, chairpersons of all the three companies, including Mr Ambani, Mr Seth and Ms Virani, would have to undergo a sentence of one month each.

The bench ordered this as it did not accept the 'unconditional apology' tendered to the court by the RCom chairman.

Mr Ambani was present in the Court when the order was announced.
 
Last month, the Swedish telecom equipment maker has petitioned the apex court to punish Mr Ambani over recurring delays in payment of its dues worth Rs550 crore. Ericsson had accused the embattled businessman of engaging in 'gross and wilful contempt' of the apex court. 
 
The company had said that insolvency proceedings should be initiated against RCom and its spectrum and tower sale deal with Reliance Jio should be stopped 'with immediate effect'. 
 
In its second contempt plea, the Swedish company had also requested the apex court to bar Mr Ambani from leaving India for defaulting on payments.
 
Earlier in October 2018, Ericsson had filed its first contempt petition in the Supreme Court. At that time, RCom had stated that it sought another 60 days for the repayment of Rs550 to the Swedish company. 
 
Last week, the Supreme Court dismissed two court masters Manav Sharma and Tapan Kumar Chakaraborty for tampering with its order in Ericsson’s contempt plea against RCom and personal appearance of the company chief Mr Ambani.
 
According to reports, on 7th January, the apex court had directed Mr Ambani to make personal appearance through a notice. However, when the order was uploaded on the SC website, it read: “personal appearance of the alleged contemnor(s) dispensed with.”
 
More details soon...  
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COMMENTS

Praveen Sakhuja

4 weeks ago

will government be able to punish Anil? NO not the least. Anil will be scot free with some legal applications, public will find theiur oeyes wide spread tp know what happened.

K V RAO

4 weeks ago

Judiciary's activism is quite welcome. In fact, the business world is observing how the matter is getting unfolded. How come the judiciary is not that active with regard to bank borrowers? Very much needed. I also appreciate Ericsson' s efforts to conclude the issue with great perseverance.

VASANT KULKARNI

4 weeks ago

POOR ANIL . HE COULD HAVE GONE WITH NIRAV, MALLYA.

kpushkar

4 weeks ago

Real fun starts now...Welcome to real world..
Hope the steel company promoters also get to enjoy free meals ..You know where

Veeresh Malik

4 weeks ago

Body language is everything. All over Delhi there is a re-alignment of thinking on how everything could be gamed going on right now.

We are listening!

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