Seminar magazine (2003) detailed Reliance founder Dhirubhai Ambani’s proximity to politicians, his enmity with Bombay Dyeing’s Nusli Wadia, the exposes by the Indian Express and Arun Shourie about illegal imports by the company and overseas share transactions by shell companies, and the botched attempt to acquire Larsen & Toubro.
As early as 1996, Outlook magazine addressed other controversies related to fake and switched shares; insider trading; and a nexus with the state-owned Unit Trust of India. Five main allegations concerning Reliance, and which have plunged the Indian capital markets into a period of uncertainty unsurpassed since the days of the securities scam were (1) Reliance issued fake shares (2) It switched shares sent for transfer by buyers to make illegal profits (3) It has indulged in insider trading in shares (4) It established a nexus with the Unit Trust of India to raise huge sums of money to the detriment of UTI subscribers (5) It attempted to monopolise the private telecom services market through front companies.
Stock market regulator Securities and Exchange Board of India (Sebi) issued a show-cause notice to Reliance Industries Ltd following a probe into alleged insider trading in Reliance Petroleum Ltd (RPL) shares in November 2007. Sebi probed transactions by entities that participated in and led to some three months of speculative rally after which the RPL stock surged to an all-time intraday high of Rs295 on 1 November 2007. In a separate and independent investigation related to the same issue, the income-tax (I-T) department looked at possible tax evasion by a dozen entities that Mukesh Ambani-owned RIL acknowledged to be its “agents”.
In Jan 2011, Sebi barred Anil Ambani and four other officials of Reliance Group—until recently known as the Reliance-Anil Dhirubhai Ambani Group (R-Adag)—companies from investing in listed shares until December 2011. Two group firms, Reliance Infrastructure Ltd (R-Infra) and Reliance Natural Resources Ltd (RNRL) were barred from making such investment until December 2012. According to Sebi’s investigations, R-Infra and RNRL were prima facie responsible for misrepresenting the nature of investments in yield management certificates/deposits, and the profits and losses in their annual reports for the fiscal years 2007, 2008 and 2009. It also found misuse of FII regulations. The then minister of state for finance Namo Narain Meena, on 1 December 2009, in a written response to a query raised in the Upper House of Parliament, said that three firms of R-Adag—R-Infra, RNRL and RCom—had violated overseas debt norms. These end-use violations were observed by the Reserve Bank of India (RBI) regarding two ECB transactions—of $360 million and $150 million—by R-Infra.
In another case, Sebi, settled a dispute with Reliance Securities Ltd (RSL) with a consent order on June 2011, under which the brokerage will spend Rs1 crore within six months on investor education and not add any new clients for 45 days starting 15 June. In the settlement, it was also added that the brokerage will also pay Rs25 lakh towards settlement charges. This order followed a Sebi investigation into RSL’s books and accounts for fiscal 2007 and fiscal 2008, which said that it had allegedly violated various clauses of Sebi stock brokers and sub-brokers regulations. The Sebi inquiry cited 20 irregularities, including the brokerage not informing clients about various charges at the time of opening accounts. RSL sought power of attorney in the name of Reliance Commodities Ltd from clients and used this to debit clients’ bank accounts, purchase and sell post office deposits and government of India bonds among other transactions. Brokerage, not fully equipped to handle its customer base at the time, used the name Reliance Money at all its offices and on employee visiting cards, instead of Reliance Securities, which was the registered trading member, leading to confusion. Brokerage was found to have received funds from other client bank accounts other than the ones available to it, thus failing to have a sound third-party check on the receipt of payments. RSL had failed to update client details despite the stock exchanges pointing this out in their inspection reports. The Sebi inquiry also said RSL collected higher securities transaction tax from its clients in 2006-2008, allotted more than one terminal in the same segment for a single user, and also collected cheques in the name of Reliance Money. Brokerage also did not maintain clear segregation between broking and other activities of group companies. Further, there were frequent disruptions in the brokerage’s trading platform, which showed connectivity problems at the applicant’s end.
Reliance Telecom was charged with criminal conspiracy to cause criminal breach of trust by a public servant, criminal conspiracy under section 120-B, cheating under section 420 and forgery under sections 468 and 471. Reliance Telecom was booked under the Prevention of Corruption Act, Resulting in to arrest of Reliance Group's corporate executives Gautam Doshi, Surendra Pipara and Hari Nayar.
The Central Bureau of Investigation (CBI) filed a chargesheet in a Mumbai court against Reliance Industries Limited (RIL) and four retired employees of National Insurance Company Limited (NICL), including a former CMD, under provisions of the Prevention of Corruption Act for criminal conspiracy and other charges. Acting on a reference from CVC in March, 2005, the CBI started probing the conspiracy that led to the filing of the chargesheet on December 9, 2011. The 2005 complaint had alleged irregularities in issuance of insurance policies — for coverage of default payments — by NICL to RIL. Chargesheet also mentioned criminal offences with dishonest intention and causing wrongful loss totaling Rs 147.41 crore to NICL and wrongful gain to the private telecom provider.
Two retired senior officials of National Insurance Company Limited and 11 others were awarded varying jail terms by a Delhi court in Jan 2014.
RIL Plane grounded
A business jet owned by Reliance Industries (RIL) was grounded by The Directorate General of Civil Aviation (DGCA) on 22 March 2014 during a surprise inspection, for carrying expired safety equipment on board; its pilot was also suspended for flying without a licence.
In May 2014, ONGC moved to Delhi High Court accusing RIL of pilferage of 18 billion cubic metres from its gas-producing block in the Krishna Godavari basin. Subsequently, the two companies agreed to form an independent expert panel to probe any pilferage.
Krishna Godavari (KG) Basin gas
The Reliance Industries Limited (RIL) was supposed to relinquish 25% of the total area outside the discoveries in 2004 and 2005, as per the Production Sharing Contract (PSC). However, the entire block was declared as a discovery area and RIL was allowed to retain it. In 2011, the Comptroller and Auditor General of India (CAG) criticized the Oil Ministry for this decision. The CAG also faulted RIL for limiting the competition in contracts, stating that RIL awarded a $1.1 billion contract to Aker on a single-bid basis.
Petition against Reliance Jio
A PIL filed in the Supreme Court by an NGO Centre for Public Interest Litigation, through Prashant Bhushan, challenged the grant of pan-India licence to RJIL by the Government of India. The PIL alleged that RJIL was allowed to provide voice telephony along with its 4G data service, by paying an additional fees of just INR16580 million (US$280 million) which was arbitrary and unreasonable, and contributed to a loss of INR228420 million (US$3.8 billion) to the exchequer.
The CAG in its draft report alleged rigging of the auction mechanism, whereby an unknown ISP, Infotel Broadband Services Pvt Ltd, acquired the spectrum by bidding 5000 times its net worth, after which the company was sold to Reliance Industries.
Petroleum Ministry document leak: It’s a Rs 10,000 cr scam
Govt asks RAW to probe Reliance lawyers
Biggest scam in indian industry - Reliance Gas Price Issue
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