Mumbai, Jan 14 (PTI) Market regulator Sebi today barredAnil Ambani-led Reliance Infra and RNRL from investing insecondary market till 2012, besides imposing a charge of Rs 50crore for settling a probe into alleged unfair market dealingsby the two firms.
The top officials of the two companies, includingChairman Anil Ambani, have also been barred from investing insecondary market till December 2011.
However, debarrment of companies and officials does notapply to investments in mutual funds, primary market issues,buybacks and open offers.
The other officials named in the order include RelianceInfra Vice Chairman Satish Seth and three directors -- S CGupta, Lalit Jalan and J P Chalsani.
The case relates to a probe by Sebi in dealings in theshares of another Anil Ambani group firm RelianceCommunications and investigations related to alleged violationof foreign investment and unfair trade practices norms.
In a consent order passed today, the Securities andExchange Board of India (Sebi) said that it has agreed tosettle the case after the two companies agreed to its certainterms and conditions, including the payment of settlementcharges -- a record high such amount charged by Sebi so far.
As per the conditions of the settlement, the two companieswould not be able to invest in any listed shares in thesecondary market, other than mutual funds, until December 2012and the individuals named in the case, which includes chairmanAnil Ambani, can not invest in secondary market untilDecember 2011.
Commenting on the Sebi order, a Reliance Infrastructurespokesperson said: "Reliance Infra has voluntarily settledSEBI show-cause proceedings of June 2010 against the companyand its directors.
"In accordance with SEBI consent mechanism, thesettlement is without admission or denial of guilt. Settlementmade in interests of investors to pre-empt unnecessary andtime-consuming litigation."
The company said that their directors have voluntarilymade payment of entire settlement fees and added thesettlement maintains full financial flexibility of the companyto implement its growth projects.
As per the order, the two companies would also have toimplement a policy of rotating their statutory auditors and,therefore, the auditors as on March 2010 cannot be reappointedfor a period of three years commencing from 2010-11.
Sources said that the companies have already implementedthe rotation of auditors policy is in accordance with riskmanagement best practices.
The companies voluntarily offered to not make investmentsin secondary market to conserve resources for investment inown substantial projects, and will not impact growth prospectsin any manner, the sources close to the development said. PTIBJ SKB VSC