Securities and Exchange Board of India has barred Anil Ambani and four board members of Reliance Natural Resources Limited from investing in the stock market till December 2011.Satish Seth, Lalit Jalan, SC Gupta and JP Chalsani. are also the four board members who have been banned along with Group Chairman Anil Ambani . In its order passed on Friday, the SEBI also banned two Anil Ambani group companies, RNRL and Reliance Infrastructure, from the secondary market for two years. Both RNRL and Reliance Infrastructure cannot invest in the secondary market till December 2012.The stock market regulator agreed to settle investigation in market dealings by the RNRL and Reliance Infrastructure for consent fees of Rs 50 crore.
“In accordance with SEBI consent mechanism, the settlement is without admission or denial of guilt. The settlement was made in interests of investors to pre-empt unnecessary and time-consuming litigation. The settlement maintains full financial flexibility of the company to implement its growth projects and order contemplates inter alia payment of settlement fees of Rs 25 crore jointly and severally by company and directors. The directors have voluntarily made payment of entire settlement fees, with no burden on Reliance Infra,” the spokesperson said.
The case is related to into certain market “dealings” by the two Anil Ambani group companies. As per SEBI, it initiated the investigation into the case after receipt of information that amounts raised by Anil Dhirubhai Ambani group companies through external commercial borrowings/foreign currency convertible bonds had been used by them to invest in stock market.
SEBI found on investigation that Reliance Infrastructure and RNRL (which has now been merged with another group firm Reliance Power) were prima facie responsible for misrepresenting the nature of investments in ‘yield management certificates/ deposits’ and the ‘profits and losses accounts in their annual reports for the years 2006-07, 2007-08 and 2008-09.On that ground, SEBI charged Reliance Infrastructure and RNRL, as also their top-management Anil Ambani, Seth, Jalan, Gupta and Chalsani of having violated varuious norms, including prohibition of fraudulent and unfair trade practices relating to securities market regulations.