Indian regulator rejects Anil Ambani settlement request over Reliance Infrastructure

MUMBAI: India’s financial markets regulator has rejected settlement applications filed by industrialist Anil Ambani and his corporate group over allegations of misusing nearly $700 million in company funds, according to documents reviewed by Reuters.

The Securities and Exchange Board of India (SEBI) last week rejected the requests over allegations that Ambani and Reliance Infrastructure improperly routed 65.26 billion Indian rupees (about $691 million) to entities linked to the company’s controlling shareholder.

The regulator alleged in September that the transactions amounted to a “misutilisation of company funds” and could have been intended for personal enrichment rather than serving the interests of public shareholders, according to the documents.

Responding to Reuters, a spokesperson for the Anil Ambani Group said the allegations were “categorically denied.”

“The matters are sub judice, and the Group will continue to defend its position as legally advised,” the spokesperson said.

SEBI did not immediately respond to Reuters’ request for comment.

According to Reuters, the regulator cited parallel investigations by other Indian enforcement agencies, including financial crime and fraud investigators, while rejecting the settlement applications.

Under SEBI’s settlement mechanism, companies can resolve regulatory proceedings by paying a monetary penalty without admitting wrongdoing. If a settlement request is rejected, the regulator may issue a detailed order outlining the alleged violations, which can result in financial penalties or restrictions on accessing India’s capital markets.

The rejection marks the second time SEBI has turned down a settlement request by Ambani. Last year, the regulator rejected his application to settle a separate case related to investments in Yes Bank.

Reliance Infrastructure had disclosed an exposure of 65.26 billion rupees to engineering contractor CLE Private Ltd, describing it as an independent entity.

However, SEBI alleged that Reliance Infrastructure diverted a much larger sum—176.7 billion rupees (about $1.9 billion)—to CLE over a decade through 2024. The regulator said CLE subsequently invested at least 112 billion rupees in companies linked to the Ambani-led Reliance ADA Group.

According to the documents, SEBI concluded that CLE was, “for all practical purposes,” functioning as a Reliance ADA Group company and was indirectly controlled by Ambani and several other officials.

Ambani, the younger brother of billionaire Mukesh Ambani, has come under increasing scrutiny from Indian regulators and enforcement agencies over the past 18 months. Several executives linked to his business group have been arrested on fraud charges, while some of his properties have been frozen. The executives have denied wrongdoing, and the cases remain before the courts.