Anil Ambani, who created the Anil Dhirubhai Ambani Group (Reliance ADA) after the $15 billion Reliance empire split, is now distancing himself from his group’s flagship companies.
He stepped down from the boards of all his listed companies in 2022. Earlier, it was not by choice but because SEBI ordered him to do so. However, now that the group and its chairman are weighed down by money laundering cases and multiple raids conducted by the Enforcement Directorate (ED), it seems like the Reliance ADAG is willingly trying to survive without the Ambani name attached.
After Anil Ambani was summoned by the ED twice this year—once in August for alleged financial irregularities involving loans taken by his group companies and recently in November for a FEMA (Foreign Exchange Management Act) probe—a spokesperson for the group clarified in a release, “Anil D. Ambani is not a member of the Board of Reliance Infrastructure.” “He served the company for about fifteen years, from April 2007 to March 2022, only as a non-executive director, and was never involved in day-to-day management of the company,” the report added.
In August, Anil Ambani had appeared before the ED and recorded his statement. This time, while Ambani has said he will fully cooperate with the ED, he has sought to do so virtually and has skipped the summons so far.
“Anil D. Ambani has offered to make himself available for the recording of his statement, at any date and time suitable to ED, via virtual appearance / recorded video,” the spokesperson of Anil Ambani said in a statement.
As investigations intensify, Anil Ambani’s companies create strategic distance
The same was the case when the ED temporarily attached his properties in a money laundering probe, or when he and Reliance Communications were flagged as “fraud” by several banks—events that have severely tarnished the image of the business tycoon who was once the sixth-richest man in the world.
Two flagship companies of the Anil Ambani-led Reliance Group, Reliance Infrastructure and Reliance Power, which became debt-free in recent years (on a standalone basis; at a consolidated level there’s still debt, though the gearing is low) have also distanced themselves from their promoter, Anil Ambani—arguably to protect both the promoter and the companies.
“Majority of the assets, by value, attached by ED belong to Reliance Communications, which is under the control of the Resolution Professional (RP) and the Committee of Creditors (CoC), led by State Bank of India… Anil D. Ambani is in no way involved with Reliance Communications and has resigned six years ago in 2019,” Reliance Infrastructure said in a BSE release.
“Anil D. Ambani has also not served on the Board of Directors of either Reliance Infrastructure or Reliance Power for over three and a half years,” the company added.
When the CBI filed two chargesheets involving Reliance Commercial Finance (RCFL), Reliance Home Finance (RHFL), Anil Ambani, and others over alleged fraudulent transactions between Ambani’s group companies and Yes Bank, under the leadership of CEO Rana Kapoor—which allegedly caused a loss of Rs 2,796 crore to Yes Bank—Reliance Power stated that both RCFL and RHFL had already undergone complete resolution with a full change in management.
“Anil D. Ambani, from the inception of both the companies, RCFL and RHFL, has never been on the Boards of either of the companies as per public records. Also, he has not been on the Board of Reliance Power for more than 3.5 years,” the company added in its BSE release.
Control of Key Group Firms Shifts Away From Anil Ambani
Both RCFL and RHFL have undergone full resolution through lender-driven processes approved by the Supreme Court in 2022 and 2023. Following the takeover, Authum assumed complete control and management of both companies.
Reliance Communications, on the other hand, is being managed by Anish Niranjan Nanavaty, appointed by the Hon’ble National Company Law Tribunal, Mumbai Bench, since 2019.
Anil Ambani also lost his flagship company, Reliance Capital, which once had a market capitalization of over Rs 70,000 crore, to IndusInd International Holdings (IIHL) after the company slipped into deep financial trouble, triggering a debt restructuring phase.
A Comeback Possible?
Will the promoter of the second half of the Reliance empire be able to recover the loss of finances and reputation? Will he be able to regain the confidence of investors once again, like the time when Reliance Power became the largest IPO in India in 2008 with a 70x subscription?
Can a man who is under the scanner of the ED, CBI, SEBI and RBI realistically tackle all the cases lined up against him? Reliance Power and Reliance Infrastructure — the two companies that are still functional and offer a faint hope of Anil Ambani making a comeback — also face regulatory pressure from time to time. Recently, earlier this year, both companies received show-cause notices from SEBI for alleged violations of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003, and the SEBI Act, 1992.
Meanwhile, how have the Anil Ambani stocks performed? The share price of Reliance Infrastructure declined 44.42% so far this year. The share price of Reliance Power has also declined 10.63% so far this year.
