HC to SEBI: Probe fraud charges

MUMBAI: After a directive from the Bombay High Court on Thursday, the Security and Exchange Board of India (SEBI) will have to look into allegations made against Anil Ambani’s Reliance Power Limited’s (RPL) Draft Red Herring Prospectus, submitted to the market regulator on October 3.

A PIL filed by Rajkot-based Rajkot Shahar/Jilla Grahak Suraksha Mandal had alleged that RPL was a “shell” company, and while preparing to launch its IPO, its promoter Anil Ambani was evading a legal provision that
requires him to contribute Rs9,000 crore as promoter’s contribution.

The petitioners had urged the court to direct SEBI and the union government to probe into the alleged fraud. However, Chief Justice Swatanter Kumar and Justice DY Chandrachud said that as the petitioners had already approached SEBI, the court need not pass any further order.

Petitioners’ counsel KT Tulsi said capital worth Rs2,000 crore and lucrative power projects were diverted from Reliance Energy Limited (REL) to RPL in an attempt to “denude” REL.

The petition said that in the process, REL was robbed of funds and some of its major power projects were transferred to RPL. The petitioners alleged this was done to “enrich” Anil Ambani by nearly Rs45,000 crore once RPL’s IPO was launched.