India’s capital market regulator Sebi has reportedly turned down Reliance Group Chairman Anil Ambani’s bid to settle charges related to Yes Bank investments. According to documents reviewed by news agency Reuters, this could leave Ambani facing penalties of no less than Rs 1,828 crore.
The case stems from investments worth Rs 2,150 crore made by Reliance Mutual Fund, then owned by Ambani, in Yes Bank’s additional tier-1 (AT-1) bonds between 2016 and 2019. These bonds were written off in 2020 when Yes Bank was declared insolvent. By then, Reliance Mutual Fund had already been sold to Nippon Life Insurance, but the charges date back to the period before the sale.
Sebi in its investigation said the investment was made in exchange for loans from Yes Bank to other Anil Ambani group companies. The regulator said on July 7 that the fund's conduct caused a loss of investor wealth of Rs 1,828 crore and had a 'market wide impact'.
According to the report, Ambani, his son Jai Anmol Ambani, and former Yes Bank CEO Rana Kapoor had proposed a settlement without admitting guilt, but Sebi turned it down on July 7. Sebi has now informed Ambani and his son that it will issue directions asking them to compensate affected investors. Monetary penalties and other actions could follow.
The matter has also been referred to the Enforcement Directorate (ED) which is already looking into other dealings between Anil Ambani’s companies and Yes Bank. The ED had recently summoned Anil Ambani to appear before it on August 5 in connection with a bank loan fraud case under the Prevention of Money Laundering Act (PMLA).
The summons came four days after the ED concluded search operations at several premises linked to Ambani's companies in Delhi and Mumbai. The raids, which began on July 24, continued for three days and covered more than 35 locations, involving over 50 companies and 25 individuals, including senior executives from Anil Ambani Group firms.
According to the ED, the probe pertains to alleged financial irregularities and diversion of over Rs 10,000 crore in loans extended to multiple group companies, primarily by Yes Bank between 2017 and 2019. The agency is also examining possible violations in the bank’s loan sanction process.
Sebi, as per the Reuters report, in its investigations found Ambani influenced investment decisions made by Reliance Mutual Fund.
"It is alleged that Anil Ambani and Jai Anmol Ambani had influence and control over Reliance Mutual Fund investment in Yes Bank's additional tier-1 bonds through Sundeep Sikka, chief executive of the fund house and chief investment officer,” stated Sebi.