Sebi Turns Down Anil Ambani, Reliance Infrastructure's Bid to Settle Fund Misuse Case

The Securities and Exchange Board of India has rejected settlement applications filed by industrialist Anil Ambani and Reliance Infrastructure over allegations that company funds worth ₹6,526 crore ($691 million) were improperly routed to entities linked to Ambani, according to documents reviewed by Reuters.

Under Sebi's settlement process, a company can pay a penalty to resolve a case without admitting wrongdoing. When Sebi rejects a settlement, it typically issues a detailed public order outlining the alleged violations, with consequences ranging from monetary penalties to restrictions on accessing capital markets. Companies and entities may appeal against such orders in court.

What Sebi Alleged

According to the documents, Sebi alleged in September that the transactions involving Ambani and Reliance Infrastructure constituted a "mis-utilisation of company funds," as they could potentially be for personal enrichment rather than serving a corporate purpose for public shareholders.

Sebi alleged a far larger movement of funds than what Reliance Infrastructure had previously disclosed. While the company had disclosed an exposure of around ₹6,526 crore to engineering contractor CLE, which it described as an independent entity, Sebi alleged that Reliance Infrastructure diverted ₹17,670 crore ($1.9 billion) to CLE. That entity then invested at least ₹11,200 crore in firms linked to the Ambani-led Reliance ADA Group over a decade through 2024.

Sebi determined that, "for all practical purposes, CLE functioned as a Reliance ADA Group company" that was "indirectly controlled" by Ambani and a few other officials, according to the documents reviewed by Reuters.

In rejecting the settlement applications, Sebi cited parallel investigations by other Indian enforcement agencies, including India's financial crime and fraud investigative agencies, the documents showed. Reliance Infrastructure said in an October exchange filing that Sebi had alleged it violated rules over its financial exposure to a connected entity, without disclosing further details.

A spokesperson for the Anil Ambani Group told Reuters that "The allegations are categorically denied. The matters are sub judice, and the Group will continue to defend its position as legally advised."

A Pattern of Scrutiny

This is the second settlement rejection for Ambani. Sebi previously rejected his plea to settle allegations in a case related to investments in India's Yes Bank.

Ambani has faced growing scrutiny from regulators and enforcement agencies over the past 18 months. Several group executives have been arrested on fraud charges and some of Ambani's properties have been frozen. The executives have denied wrongdoing and the cases remain in the courts.

Reliance Infrastructure has secured board approval to raise up to ₹3,000 crore from the public, a fundraise the company has described as vital.