Sebi to hear ADAG case on Nov 6

The Securities and Exchange Board of India (Sebi) has given top executives of the Anil Dhirubhai Ambani Group (ADAG), including chairman Anil Ambani, another opportunity for a personal hearing, on November 6, in the matter related to alleged violation of foreign debt norms. Anil Ambani was called for a personal hearing on August 2 but he didn’t come.

According to a person privy to the development, entities that include four top ADAG executives, apart from Anil Ambani, had sought some more time from the regulator before appearing personally to put forth their case and inspect the documents.

“They asked for some more time and so we have set November 6 as the next date for personal hearing in the matter,” said a person familiar with the development, on condition of anonymity.

He refused to divulge further details on the progress in the case. “First, we will see what happens on November 6 and then decide on the future course of action,” he added.

Apart from Anil Ambani, the other four who did not appear for a hearing on respond to the showcause notices on August 2 were Satish Seth, vice-chairman, Reliance Infrastructure, and directors Lalit Jalan, J P Chalasani and S C Gupta. According to reports, only Reliance Natural Resources Ltd and Reliance Infrastructure Ltd, through their advocate, attended the hearing on August 2.

During a personal hearing, it is not mandatory for the person named in the showcause notice to attend. He can be represented through an ‘authorised person’. In other words, Anil Ambani or any of the persons named can send their laywers on their behalf.

The case goes back to December 2009, when the government made a statement in Parliament that three firms of the Anil Ambani group — Reliance Infrastructure, Reliance Natural Resources and Reliance Communication — had violated overseas debt norms.

In a written reply in Rajya Sabha, the minister of state for finance, Namo Narain Meena, said end-use violations were observed by the Reserve Bank of India in respect of two external commercial borrowing (ECBs) transactions by Reliance Infrastructure — $360 million and $150 million.

The company brought the proceeds raised through the ECBs to India and kept these invested in debt mutual funds, pending utilisation for the declared end-use, in gross violation of the existing guidelines, he said.

The capital markets regulator sent showcause notices to eight ADAG entities on June 9 and directed them to inspect the documents and reply to the notices by June 30. Thereafter, in July, it gave the entities an opportunity for personal hearing on August 2.