The Securities and Exchange Board of India (SEBI) has rejected settlement applications filed by Reliance Infrastructure Limited, its promoter Anil Ambani and other connected entities in proceedings relating to the alleged diversion of Rs 6,526 crore of company funds, paving the way for adjudicatory proceedings under the securities laws.
The settlement applications had been filed under SEBI’s settlement framework, which permits entities facing regulatory proceedings to resolve enforcement actions without admitting or denying the alleged violations upon payment of a settlement amount. However, the regulator retains discretion to reject such applications where the allegations are serious, involve a larger public interest or have wider implications for the securities market.
The proceedings arise out of a show-cause notice issued by SEBI in 2025 under the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations. The market regulator alleged that Reliance Infrastructure misutilised company funds by routing Rs 6,526 crore through engineering contractor CLE Private Limited, which allegedly transferred substantial sums to entities associated with the Anil Dhirubhai Ambani (ADA) Group.
According to SEBI, the transactions constituted a diversion and misutilisation of corporate funds for purposes unrelated to the interests of public shareholders. The regulator has also sought restoration of the allegedly diverted amount to Reliance Infrastructure, along with applicable interest from 2018.
The investigation commenced after concerns emerged from Reliance Infrastructure’s financial statements for the financial years 2018-19 and 2019-20. During this period, the company created provisions against certain receivables, while its statutory auditor issued a disclaimer regarding the recoverability of those amounts. These disclosures prompted SEBI to initiate a forensic examination of the underlying transactions.
SEBI has alleged that funds were channelled through engineering, procurement and construction (EPC) contracts and subcontracting arrangements before ultimately reaching entities linked to the Reliance ADA Group.
While Reliance Infrastructure had earlier disclosed an exposure of approximately Rs 6,526 crore to CLE Private Limited, describing it as an independent engineering contractor, the regulator concluded that CLE functioned as a Reliance ADA Group entity and was indirectly controlled by Anil Ambani and certain other officials.
According to documents cited in reports, SEBI’s investigation found that Reliance Infrastructure transferred nearly Rs 17,670 crore to CLE over a period extending up to 2024, of which at least Rs 11,200 crore was allegedly invested in companies connected with the Reliance ADA Group.
While rejecting the settlement applications, SEBI also took note of parallel investigations being conducted by other enforcement agencies, including the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI), which are examining alleged money laundering, financial irregularities and corruption-related offences involving companies of the Reliance ADA Group.
The ED is stated to have provisionally attached assets worth over Rs 19,000 crore linked to the group and filed multiple prosecution complaints. Its investigation is reportedly based on inputs received from the National Housing Bank, SEBI, the National Financial Reporting Authority (NFRA) and Bank of Baroda.
This marks the second time SEBI has declined a settlement proposal made by Anil Ambani. The regulator had earlier rejected his request to settle proceedings relating to investments in Yes Bank.
Under SEBI’s enforcement framework, rejection of a settlement application ordinarily results in continuation of adjudication or enforcement proceedings, which may culminate in monetary penalties, disgorgement, market access restrictions, debarment from the securities market or other regulatory directions, subject to the findings recorded in the final order. Any adverse order passed by SEBI can subsequently be challenged before the Securities Appellate Tribunal.
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