Anil Ambani, chairman of the Reliance ADA Group, on Monday denied that the Securities and Exchange Board of India (Sebi) had banned his two group companies, Reliance Infra and Reliance Natural Resources, or their directors from participation in the capital market for any period. "Sebi has placed no restrictions on raising of equity and debt resources by any Reliance ADA Group company or individual... The matter has been settled through voluntary consent proceedings as stated in the Sebi order," he said.
On Friday, Sebi had said R-Infra and RNRL "shall not make investments in listed securities in the secondary markets (other than mutual funds) until December 2012".
The order was to settle a probe into the alleged violation of regulations for foreign investment and unfair trade practices by R-Infra and RNRL, and on share dealings in another ADA company, Reliance Communications.
The terms included payment of Rs 50 crore (Rs 500 million) as settlement charges, which were paid by the directors without any financial burden
on the companies involved.
Further, the two companies, Ambani and four other directors offered to abstain from any investment in listed stocks, subject to certain conditions, according to the Sebi order.
While R-Infra and RNRL cannot invest in the secondary market till 2012, Ambani and the other directors would not do so till December 2011.
However, the bar did not apply to investments in mutual funds, primary market issues, buybacks and open offers.
"The full financial flexibility of the group is protected and there are no restrictions that could impact the growth of the group companies," said Ambani, addressing the media at his corporate headquarters.
The order does not hinder the company's prospects to "disinvest/monetise existing as well as future listed/unlisted investments," said the presentation made by Ambani.
'Learning process'
Ambani, in his attempts to allay shareholders' concerns and calm market sentiments, said the consent order had been a "learning process", based on which internal systems have been strengthened.
"We have done our due diligence internally. We have changed our audit firm and have put in place checks and balances," he said. The consent terms included a clause that R-Infra and RNRL had to implement a policy of rotation of statutory auditors.
