SEBI bars RNRL, R-Infra

The Securities and Exchange Board of India (SEBI) on Friday barred Anil Ambani-led Reliance Infra and RNRL from investing in the secondary market till 2012, besides imposing a charge of Rs.500000000 for settling a probe into alleged unfair market dealings by the two firms. The top officials of the two companies, including Chairman Anil Ambani, have also been barred from investing in the secondary market till December 2011. However, debarment of companies and officials does not apply to investments in mutual funds, primary market issues, buybacks and open offers. The other officials named in the order include Reliance Infra Vice Chairman Satish Seth and three directors — S. C. Gupta, Lalit Jalan and J. P. Chalsani. The case relates to a probe by SEBI in dealings in the shares of another Anil Ambani group firm Reliance Communications and investigations related to alleged violation of foreign investment and unfair trade practices norms. In a consent order passed on Friday, SEBI said it had agreed to settle the case after the two companies agreed to its certain terms and conditions, including the payment of settlement charges — a record high such amount charged by SEBI so far. Commenting on the SEBI order, a Reliance Infrastructure spokesperson said “Reliance Infra has voluntarily settled SEBI show-cause proceedings of June 2010 against the company and its directors. “In accordance with the SEBI consent mechanism, the settlement is without admission or denial of guilt. The settlement made in interests of investors to pre-empt unnecessary and time-consuming litigation.” The company said its directors have voluntarily made payment of the entire settlement fees and added the settlement maintains full financial flexibility of the company to implement its growth projects. As per the order, the two companies would also have to implement a policy of rotating their statutory auditors and, therefore, the auditors as on March 2010, cannot be reappointed for three years commencing from 2010-11. Sources said the companies had already implemented the rotation of auditors policy in accordance with the risk management best practices. — PTI The two companies cannot invest in secondary market till 2012