Sebi rejects Anil Ambani, Rana Kapoor settlement pleas in Yes Bank case

Synopsis

Sebi has turned down settlement requests from Anil Ambani, his family, and Rana Kapoor. The case involves investments between Reliance Nippon and Yes Bank. Investigations revealed Ambani influenced investment decisions. Sebi might settle with Nippon Life India Asset Management and some officials. Legal action will proceed against Ambani and others. The Enforcement Directorate is also investigating the matter.

Mumbai: The Securities and Exchange Board of India (Sebi) has rejected the settlement applications filed by Reliance Group chairman Anil Ambani, his family member, and former Yes Bank CEO Rana Kapoor over alleged wrongdoing linked to investments by Reliance Nippon Life India Asset Management and the lender, said two people close to the development.

The case relates to a quid pro quo deal by erstwhile Reliance Nippon Life India Asset Management (now Nippon Life India Asset Management) involving Yes Bank's additional tier-1 (AT-1) bonds, which in turn subscribed to the non-convertible debentures of the AMC's then sponsor, the Reliance Group. The group has since exited the mutual fund business.

Sebi's investigations found that Ambani had influenced investment decisions made by Reliance Nippon Life India Asset Management, one source said.

The regulator, however, is likely to settle charges against Nippon Life India Asset Management, its current CEO Sundeep Sikka and two other senior officials for alleged losses caused to investors, they added.

With the rejection of the settlement application, Sebi will now proceed with legal action against these individuals.

Email queries sent to Reliance Group, Nippon Life India Asset Management and Sebi did not elicit any response till press time.

Institutional investors, including Reliance Nippon Life India Asset Management, and individuals had invested over ₹8,400 crore in Yes Bank's AT-1 bonds, which were perpetual bonds without maturity dates. These securities were written down to zero in March 2020 as part of the lender's restructuring, resulting in losses for investors.

The AT-1 bondholders had approached various courts, claiming the securities were sold illegally.

Reliance Nippon Life India Asset Management had one of the largest exposures to Yes Bank's AT-1 bonds.

Sikka was CEO of Reliance Nippon Life India Asset Management when the fund house invested in Yes Bank's AT-1 bonds. Reliance Capital sold its entire stake in the mutual fund to partner Nippon Life India Asset Management, with the Japanese firm retaining the team led by Sikka.

The regulator has also shared its investigation report with the Enforcement Directorate, a source said.

Last month, the investigative agency searched locations linked to the Reliance Group. The probe relates to alleged illegal diversion of ₹3,000 crore loans taken from Yes Bank.