- The payment of fine is unarguably one of the biggest imposed under these Regulations by the market regulator SEBI;
- The companies and individuals involved (which includes Mr. Anil D. Ambani himself) are debarred from making an investment in listed securities till December 2012 and December 2011 respectively; and
- The companies involved have been directed to adopt a rotation policy as far as the statutory auditors are concerned.
14 Jan 2011
In as much as it may be termed as an unprecedented order, the Securities & Exchange Board of India (SEBI) in its Order issued today in the matter of M/s Reliance Infrastructure Ltd. & Ors. has passed a "Consent Order" directing and accepting the payment of Twenty Five Crores Rupees each from Reliance Infrastructure Ltd. and Reliance Natural Resources Ltd. to culminate the proceedings under the SEBI (Prohibition of Fraudlent and Unfair Trade Practices relating to Securities Market) Regulations, 2003.
The proceedings, as the order states, had been initiated towards the diversion of funds raised by the co-noticees from External Commercial Borrowings (ECBs) / Foreign Currency Convertible Bonds (FCCBs) to invest in the stock markets and thus violated the Regulations and the provisions of other laws. The Order further notes that the terms on which it has been passed, i.e. requiring the deposit of a sum of Rs. 50 crores, along with other conditions, were proposed by the co-noticees themselves, which is an indication sufficient enough for an insight on the state-of-affairs.
The Order is unprecedented on various counts, which makes it a reason for appearing on this blog;
The Order further provides that it "shall remain applicable on surviving corporate entities should any of the corporate applicants undergo any change on account of merger, amalgamation or restructuring or any similar corporate action". Thus merely by changing the corporate form the conditions imposed cannot be hoodwinked.