SEBI order hits Anil Ambani stocks, R-Infra at year-low

Massive sell-off saw the shares of Anil Ambani group firms plummeting by up to 9.3% in early trade after Reliance Infra and RNRL agreed to abstain from investing in listed stocks till next year as per a regulatory settlement with SEBI. R-Power, with whom RNRL has now merged, fell by 9.35% to an early low of Rs. 133.20, while R-Infra fell to its lowest level in a year at Rs. 732.85, down 8.18% on the National Stock Exchange. Among other group firms, Reliance Capital declined by 5.9%, and RCom was down 4.36%. In a consent order after market close on Friday last week, SEBI said it has settled a probe into alleged violation of regulations for foreign investment and unfair trade practices by RNRL and R-Infra after the two companies offered to abstain from investing in secondary market till December 2012. Besides, the two companies have paid a total of Rs. 500000000, through their directors, as settlement charges. Anil Ambani, Chairman of both the companies, and four other directors would also not invest in listed stocks till December 2011. However, they can invest in mutual funds, primary market, buybacks and open offers. Despite Anil’s clarification yesterday that his group firms settled the SEBI probe voluntarily and his claim that the regulator has not imposed any ban on its own from participation in the capital market, the group stocks fell sharply. Meanwhile, the 50-share benchmark Nifty was trading flat at 5,656.85 at 1220 hours.