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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