Sebi settlement was voluntary: Anil Ambani

Anil Ambani today claimed that his two group firms -- Reliance Infra and RNRL -- settled the Sebi probe voluntarily and the regulator has not imposed any ban on the companies or their directors from participation in the capital market.Contesting media reports that Sebi barred two group firms and its directors from dealing in the capital market, Ambani told reporters, "Sebi has not banned R-Infra, RNRL, Anil Ambani, other directors from capital markets or from stock markets."

"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.

Ambani's clarification comes in the wake of Sebi passing a consent order on Friday to settle a probe into the alleged violation of regulations for foreign investment and unfair trade practices by Reliance Infra and RNRL.

The terms include payment of Rs 50 crore as settlement charges, which have been paid by the directors without any financial burden on the companies involved.

Furthermore, the two companies, their Chairman Anil 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, Chairman Anil Ambani and the other directors will not do so till December, 2011.

However, the debarment of companies and officials does not apply to investments in mutual funds, primary market issues, buybacks and open offers.

The 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 case relates to a probe by Sebi into dealings in the shares of another Anil Ambani group firm Reliance Communications and alleged violation of foreign investment and unfair trade practices norms by R-Infra and RNRL.

"In accordance with Sebi consent mechanism, the settlement is without admission or denial of guilt. Settlement (was) made in interests of investors to preempt unnecessary and time-consuming litigation," Ambani said.

Sebi had also said the consent order was without prejudice to its right to initiate enforcement action, including reopening of the proceedings pending against the entities if any of its terms were breached or any of the representations made before it were found to be untrue.

Asserting that Reliance Power (since RNRL has merged with RPower) will be India's largest power generation company, with a market cap of over Rs 40,000 crore already, Ambani said the company retains the full financial flexibility to raise resources and implement its growth plans. 

Similarly, Reliance Infra is also poised to be India's largest infrastructure company, with over a market cap of Rs 22,000 crore, he said."In the interests of 11 million investors, directors have made payment of entire settlement fee. No burden on R-Infra and RPower," he said.

Ambani also said the company has already adopted a policy for mandatory rotation of statutory auditors every three years, as stipulated in Sebi's Consent Order.When asked whether any other case against him is still pending with Sebi, he said, "No case has been pending against me with Sebi."