We know our market regulator, the Securities and Exchange Board of India (SEBI), has failed us in the past, on more occasions than one. Parliamentary committees and courts have rapped it for its various failures – failure to discharge its duties that led to stock market scams and then giving clean chits, instead of punishment, to the guilty. What is disconcerting, however, is that it keeps doing more of the same.

The latest to come to notice involves a big and powerful corporate entity, the Anil Ambani-controlled conglomerate. Reuters reports that the UK’s regulator, Financial Services Authority (FSA), has found two Anil Ambani firms indirectly investing in a Mauritius-based fund which was then used to make an investment of $250 million in its own company, Reliance Communications - in violation of Indian laws. It even secured conviction of a banker involved with the case, while its counterpart in India, SEBI, which too probed the case, has settled the matter with no conviction but a fine of $10 million and buried the case!

The report says Anil Ambani’s group, which was not a party to the FSA’s case, has said it didn’t even know that this investment happened. “The investors are unlikely to get more details from Ambani. And SEBI has settled and moved on. The mystery will die down, but the sense that India’s market (regulator) isn’t quite working is hard to shake off,” comments the Reuters article.

Sobering thoughts indeed. Though such back channel return of the money via the tax haven of Mauritius is not particularly revealing. But who will bell the cat? Not SEBI, for sure.

Click on this link to read the Reuters report:
BREAKINGVIEWS - Anil Ambani mystery reflects poorly on India