SEBI rejects Anil Ambani’s plea to Settle Charges in YES Bank Case
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The capital market regulator Securities and Exchange Board of India (SEBI) has rejected Anil Ambani’s plea to settle charges in Yes Bank case. As per reports, the investigation is ongoing in investments worth ₹2,134.11 crore made in private sector lender – Yes Bank. Consequently, Anil Ambani might have to pay a huge fine of $208.4 million (₹1,813 crore).
Between 2016-2019, Ambani’s Reliance Mutual Fund invested $245.3 million (₹2,134.11 crore) in Yes Bank’s Tier-1 bonds. Subsequently, the bonds were written-off when the bank was declared insolvent in 2020, causing loss to investors who had ploughed their money in the mutual fund. According to SEBI, the mutual fund investors faced wealth erosion of ₹18 billion (₹1,800 crore) as a result of the write-offs.
Why Sebi denied Ambani’s Yes Bank settlement plea?
According to SEBI, Anil Ambani had invested in Yes Bank’s Tier-1 bonds through the mutual fund in exchange of loans from Yes Bank for other Anil Ambani group companies. Now, SEBI has asked Anil Ambani to return investors’ money worth ₹18 billion (₹1,800 crore). SEBI might also levy penalties on Anil Ambani.
SEBI also found that Anil Ambani influenced investment decisions made by Reliance Mutual Fund. It is alleged that Anil Ambani and Jai Anmol Ambani had influence and control over Reliance Mutual Fund investment in Yes Bank’s additional tier-1 bonds through Sundeep Sikka, chief executive of the fund house and chief investment officer. Sebi has also shared this information with Enforcement Directorate (ED).
Earlier, the ED had conducted raids over 35 premises, 50 companies and over 25 persons related to the Anil Ambani group companies over a ₹3,000 crore loan with the Yes Bank.
ED has accused Anil Ambani of illegal loan diversion of around ₹3,000 crore procured from the Yes Bank.
The Enforcement Directorate (ED) has launched a detailed investigation into a major loan fraud case involving ₹17,000 crore linked to companies owned by businessman Anil Ambani. An important point in the investigation is why 39 banks failed to report or act on the fraud, even after the loans had turned into non-performing assets (NPAs).
According to the ED, one bank – Yes Bank, gave loans of about ₹3,000 crore between 2017 and 2019 to certain companies. But instead of using the money for business purposes, a large portion of it was allegedly diverted to shell companies (firms that exist on paper but have no real operations) and other related entities.
A big question of bribery has been raised over officials of YES Bank. As per reports, Top officials of Yes Bank cleared loans of around Rs 3,000 crore to companies helmed by Anil Ambani without due diligence.
