ADAG denies illegal funds transfer charge

Two UBS bankers here unsuccessfully tried to create an offshore investment entity allegedly to enable industrialist Anil Ambani route his funds back into the Indian stock market, said a media report quoting proceedings at a financial market tribunal here.

In a statement issued from New Delhi, Anil Ambani-led Reliance Group, however, said that no charges have been levelled against them by the UK regulators in these proceedings.

The group also said that the five-year-old matter relates to a regulatory action in the UK against a foreign bank's former employees for misuse of client accounts and unauthorised trades made by them.

British daily Financial Times has reported that "two UBS bankers tried to create an offshore vehicle through which one of India’s most powerful businessmen could illegally invest in securities at home, according to evidence heard in a London tribunal".

"Anil Ambani, whom bank executives described as a 'mega-client', was the ultimate owner behind a Mauritius-based vehicle called Pleuri, the tribunal heard," the report said, while noting that Indian nationals and companies are not permitted to invest in Indian securities through foreign institutional investors.

"Pleuri was established with the specific objective of investing in Indian stocks, according to evidence presented by the UK's financial regulator in a case against the former head of UBS' London-based India desk," the report added.

Reacting to the report, a Reliance Group spokesperson said that "the matter relates to regulatory action in the UK against former employees of a foreign bank, for unauthorised trades made by them and misuse of a large number of client accounts.

"The bank has already accepted the weaknesses in its internal systems and processes, and settled the matter with the UK regulators by payment of a fine."

"There are no charges levelled against us by the UK regulators in these proceedings. As such, we are not party to these proceedings, and not represented therein," he added.

The spokesperson said that "the matter is nearly 5 years old, and has already been closed with the Indian regulators under the consent order framework in January 2011."

He said that all the aspects reported by the media "including the ownership and/or beneficial status of certain entities investing in India, were considered by the Indian regulators, while passing the consent order in January 2011."