MUMBAI: Markets regulator Sebi on Wednesday imposed a Rs 25-crore fine collectively on Mukesh Ambani and Anil Ambani, the erstwhile main promoters of the undivided Reliance Group, along with several of the family members and group companies.
They were penalised for alleged irregularities relating to the issue of 12 crore equity shares in January 2000 by Reliance Industries (RIL). Sebi imposed the penalty on Ambani family members and related entities since it was found that the takeover code was violated during the allotment of shares by RIL.
According to Sebi’s order, in January 2000, RIL allotted 12 crore shares to 38 entities from within the Reliance Group. The allotment was made after exercise of the option on warrants attached with 6 crore non-convertible debentures (NCDs), which were issued in 1994.
From the disclosure filed with the bourses by RIL, it was found that these 38 entities were ‘persons acting in concert’ (PACs) with RIL promoters.
Through this conversion, RIL promoters together with the PACs had increased their stake in the company from 22.7% as of end-March 1999 to 38.3% as of end-March 2000. Out of these, 7.8% shares were acquired as a result of a merger and hence were exempt under the then prevailing Takeover Regulations.
However, 6.8% shares that were acquired by RIL promoters together with PACs in exercise of 3 crore warrants were alleged to be in excess of the 5% ceiling under the same regulation. Hence the imposition of the Rs 25-crore fine on these entities, the Sebi order said.
RIL was yet to comment on the Sebi order, which was issued on Wednesday evening. Sebi said that the Ambani brothers and all the other entities named in the order jointly and severally would pay the total fine within 45 days of the receipt of the order.
The order noted that while determining the quantum of penalty, no quantifiable figures or data were available on record to assess the disproportionate gain or unfair advantage and amount of loss caused to an investor or group of investors as a result of the default committed by the entities.
“However, the fact remains that the (RIL group entities and promoters) by their failure to make public announcement, deprived the shareholders of their statutory rights/ opportunity to exit from the company,” it noted.