Ambani May be Fined ₹1,828 cr as SEBI Rejects his Yes Bank Settlement Plea: Report
In a major development, the Securities and Exchange Board of India (SEBI) has rejected the settlement plea of Anil Ambani, the chairman of Reliance Group, and Rana Kapoor, the former CEO of Yes Bank, in a case related to investments made by Reliance Mutual Fund in Yes Bank’s tier-1 bonds. This rejection could lead to a massive penalty of ₹1,828 crore for Ambani and his group, as per a report by Reuters.
The case dates back to 2019, when Reliance Mutual Fund invested ₹2,150 crore in Yes Bank’s tier-1 bonds. It was alleged that this investment was made in exchange for loans to Ambani’s other companies. However, when Yes Bank declared insolvency in 2020, these bonds were written off, causing significant losses to the investors.
SEBI had launched an investigation into the matter and found that there were irregularities in the transactions. In 2020, SEBI had issued a show-cause notice to Ambani, Kapoor, and other officials, seeking explanations for the alleged irregularities. Ambani and Kapoor had later filed a settlement plea with SEBI, offering to pay a fine and return the profits made from the investments.
However, SEBI has rejected the settlement plea, citing that the plea did not provide sufficient clarity on the transactions and the role of the parties involved. SEBI has also found that Ambani’s group had not disclosed the loans taken from Yes Bank to Ambani’s other companies, which was a violation of the regulatory norms.
The rejection of the settlement plea is a significant blow to Ambani, who has been facing heat from regulators and investors over the past few years. Ambani has been under investigation for various financial irregularities, including the alleged misuse of funds and non-disclosure of material information to investors.
The fallout of the rejection of the settlement plea could be severe for Ambani and his group. SEBI could impose a fine of ₹1,828 crore on Ambani and his group, which would be one of the largest penalties ever imposed by the regulator. Additionally, Ambani’s group could also face legal action and potentially face criminal charges for violating the regulatory norms.
The rejection of the settlement plea is also a significant setback for Rana Kapoor, who had been under investigation for his role in the alleged irregularities. Kapoor has been accused of misusing his position as the CEO of Yes Bank to benefit his friends and family, and the rejection of the settlement plea could lead to further legal action against him.
The case highlights the need for greater transparency and accountability in the financial sector. The alleged irregularities in the transactions between Reliance Mutual Fund and Yes Bank’s tier-1 bonds were only discovered after a thorough investigation by SEBI. This highlights the importance of regulatory oversight and the need for investors to have access to accurate and timely information.
In conclusion, the rejection of the settlement plea by SEBI in the case of Reliance Mutual Fund and Yes Bank’s tier-1 bonds is a significant development that could have far-reaching implications for Anil Ambani and his group. The potential fine of ₹1,828 crore and the potential legal action against Ambani and Kapoor highlight the need for greater transparency and accountability in the financial sector.
Sources:
