The latest report on Reuters claims that SEBI has rejected a plea by industrialist Anil Ambani to settle charges related to investments in Yes Bank, potentially exposing him to at least Rs 1800 crore penalty.
The case relates to Rs 2150 crore invested by Ambani’s Reliance Mutual Fund between 2016-2019 in Yes Bank‘s additional tier-1 bonds, which were written off when the bank was declared insolvent in 2020, as per Reuters.
What are the charges?
In its investigation, the market regulator said the investment was made in exchange for loans from Yes Bank to other Anil Ambani group companies.
Rejecting Ambani’s pleas to settle the charges without admitting guilt, the regulator said on July 7 that the fund’s conduct caused a loss of investor wealth of Rs 1828 crore and had a ‘market-wide impact’.
Last month, India’s top Enforcement Directorate searched locations linked to the group as part of a scheme to siphon off 30 billion rupees in loans from Yes Bank,
A proposal by Anil Ambani, his son Jai Anmol Ambani, and former Yes Bank chief executive Rana Kapoor to settle has not been accepted by SEBI.
SEBI has informed Ambani and his son that it will pass directions asking them to compensate the investors. Additional action could include monetary penalties, the SEBI report says.
“SEBI has also shared its findings with the Enforcement Directorate,” two sources with direct knowledge of the matter told Reuters.
Involvement of Ambani family
In its investigation, SEBI found that the Anil Ambani family influenced investment decisions made by Reliance Mutual Fund.
“It is alleged that Anil Ambani and Jai Anmol Ambani had influence and control over Reliance Mutual Fund investment in Yes Bank’s additional tier-1 bonds through Sundeep Sikka, chief executive of the fund house and chief investment officer.” SEBI said.
SEBI’s notice cites meetings between Ambani and fund house executives at the time of the said investments. It also cited emails where Kapoor characterised investments into Reliance Group entities as a ‘bilateral relationship deal’.
The SEBI notices have also charged the fund house, its chief executive, chief investment officer and former chief risk officer for alleged losses to investors.