SEBI Rejects Anil Ambani Settlement Plea Over Alleged Fund Diversion
India’s capital markets regulator has rejected settlement applications filed by industrialist Anil Ambani and his corporate group over allegations involving the alleged misuse of company funds worth nearly $700 million. The decision marks another regulatory setback for the businessman as investigations into his business empire continue.
SEBI Rejects Settlement Applications
The Securities and Exchange Board of India (SEBI) last week rejected settlement requests submitted by Anil Ambani and Reliance Infrastructure over allegations that 65.26 billion rupees (approximately $691 million) of company funds were improperly routed to entities linked to the group’s controlling shareholder.
Documents reviewed by Reuters show that SEBI alleged the transactions amounted to a “mis-utilisation of company funds”, arguing they may have been intended for personal enrichment rather than serving the interests of public shareholders.
The regulator has not publicly disclosed the detailed reasons for rejecting the settlement applications. However, the documents indicate that SEBI cited ongoing parallel investigations by other Indian enforcement agencies, including financial crime and fraud investigators.
SEBI did not respond to Reuters’ request for comment.
Ambani Group Denies Allegations
Responding to Reuters, a spokesperson for the Anil Ambani Group said the allegations are “categorically denied.”
The spokesperson added that the matters are currently before the courts and that the group will continue to defend its position through legal proceedings.
This is the second time SEBI has rejected a settlement request filed by Ambani. Last year, the regulator also declined his application to settle allegations linked to investments in Yes Bank.
Under SEBI’s settlement framework, companies may resolve regulatory proceedings by paying a monetary penalty without admitting guilt. If a settlement is rejected, the regulator can issue a detailed public order that may impose financial penalties or restrict access to India’s capital markets. Such orders can subsequently be challenged in court.
Alleged Transactions Under Investigation
Reliance Infrastructure previously disclosed an exposure of approximately 65.26 billion rupees to engineering contractor CLE Private Ltd, describing the company as an independent entity.
However, according to the documents reviewed by Reuters, SEBI alleged that Reliance Infrastructure diverted a much larger sum of 176.7 billion rupees (around $1.9 billion) to CLE over a decade through 2024.
The regulator further alleged that CLE subsequently invested at least 112 billion rupees in companies associated with the Ambani-led Reliance ADA Group.
SEBI also concluded that CLE was not operating as an independent company. Instead, the regulator alleged that, “for all practical purposes,” it functioned as a Reliance ADA Group company that was indirectly controlled by Anil Ambani and several other officials.
CLE did not immediately respond to Reuters’ request for comment.
Fund-Raising Plans Face Added Scrutiny
The regulatory proceedings come as Reliance Infrastructure prepares to raise fresh capital after receiving board approval to seek up to 30 billion rupees from public investors.
Anil Ambani, the younger brother of billionaire Mukesh Ambani, has faced increasing scrutiny from regulators and enforcement agencies during the past 18 months. Several executives linked to his business group have been arrested on fraud-related charges, while some of his properties have been frozen. Those executives have denied wrongdoing, and the legal proceedings remain ongoing.
With inputs from Reuters