Sebi slaps bar on Anil firms
Market regulator Sebi today barred Anil Ambani-led Reliance Infra and RNRL from investing in secondary market till 2012, besides imposing a charge of Rs 50 crore for settling a probe into alleged unfair market dealings by the two firms.
Stock market regulator Sebi on Friday barred two Anil Ambani group companies — Reliance Infrastructure and Reliance Natural Resources (RNRL)— from investing in the secondary market till 2012.
Sebi also imposed a charge of Rs 50 crore for settling a probe into alleged unfair market dealings by the two firms.
Top officials of these two companies, including Chairman Anil Ambani, have also been barred from investing in the secondary market till December 2011.
Other officials named in the order include Reliance Infra Vice Chairman Satish Seth and three directors — S C Gupta, Lalit Jalan and J P Chalsani.
The Sebi directive means the two companies and the senior executives will not be able to buy or sell shares of any publicly listed companies in the secondary market. But they are free to buy shares of private companies, shares in the primary market and invest in mutual funds.
The Sebi directive may at best hamper the treasury operations of the two companies using surplus funds.
As both Reliance Infra and RNRL are not finance companies, their treasury operations are not their core-business.
Since the Sebi ban will have no impact on the operations of these two companies, their share prices did not react much.
On Friday, Reliance Power closed at Rs 42.15 against the previous closing of Rs 42.30 on the Bombay Stock Exchange. The R-Infra scrip declined by 1.40 per cent to close at
Rs 798.25 but analysts maintain that there is nothing significant to suggest that the decline was due to the Sebi order.
Thus the Sebi order as such may not have much impact on the share prices of the two tainted companies.
The consent order issued by the market regulator pertains to the case of a Sebi probe into dealings in the shares of another Anil Ambani group firm Reliance Communications and investigations related to alleged violation of foreign investment and unfair trade practices.
In its order, Sebi stated that it has offered to settle the case after the two companies agreed to certain terms and conditions, including payment of settlement charges — a record high amount charged by Sebi so far.
Show-cause proceeding
A Reliance Infrastructure spokesperson said: “Reliance Infra has voluntarily settled the Sebi show-cause proceedings of June 2010 against the company and its directors.”
In accordance with Sebi consent mechanism, “the settlement is without admission or denial of guilt. The settlement has been made in the interest of investors to pre-empt unnecessary and time-consuming litigation.”
The company said their directors have voluntarily made payment of the entire settlement fee.
It added that the settlement maintains full financial flexibility of the company to implement its growth projects.
The two companies, as per the order, also have to implement a policy of rotating their statutory auditors and, therefore, the auditors as on March 2010 cannot be reappointed for a period of three years commencing 2010-11.
