India: Ambani’s reputation hits a new low
Reliance Adag chairman faces regulatory sanctions; Company’s governance shown to be wanting
Anil Ambani is under pressure to turn around struggling businesses
A consent order handed down by India’s capital market regulator requiring two companies within Anil Ambani’s business empire to halt trading in onshore-listed Indian securities until the end of 2012 is more than a humiliating slap in the face for one of India’s most prominent businessmen.
It also marks out (another) new low for one of corporate India’s former stars – the latest in a string of financial mistakes and mis-steps that have eroded, perhaps irreversibly, the 51-year-old’s financial reputation.
When the Securities and Exchange Board of India (Sebi) handed down its decision in mid-January an audible groan emanated from Reliance Adag, Ambani’s holding group.
The regulator’s report was damning. Two listed divisions, Reliance Infra (R-Infra) and Reliance Natural Resources (RNRL), each paid Sebi a $5.5 million settlement fee and agreed not to trade listed Indian securities until the end of 2012 following a probe into the breach of overseas borrowing regulations and misrepresentation of their end-of-year financial statements in 2007, 2008 and 2009.