Reliance Power Ltd. and Reliance Infrastructure Ltd., both part of the Anil Ambani-led Reliance Group, have received show cause notices from the Securities and Exchange Board of India (SEBI). The notices relate to alleged fraudulent practices in financial dealings, specifically concerning a ₹6,503 crore settlement between Reliance Infrastructure and CLE Private Limited (formerly Crest Logistics and Engineers Pvt. Ltd.).
SEBI’s Allegations
SEBI issued the notices under the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003. The regulator is questioning the transparency and legality of the transactions between Reliance Infrastructure and CLE Private Limited, seeking clarification on the settlement process and compliance with regulations.
Background of the Settlement
In February 2025, Reliance Infrastructure resolved a long-standing dispute with CLE Private Limited through mediation conducted by a retired Supreme Court judge in the Bombay High Court. The settlement agreement amounted to ₹6,503 crore, which the company claims was fully implemented as per the Mediation Act, 2023.
Reliance Infrastructure has emphasized that the ₹6,500 crore exposure was disclosed in its financial statements over the past four years and was publicly announced on February 9, 2025. The company denies any wrongdoing and maintains that all procedures were followed legally.
Regulatory Actions Leading Up to the Notices
This development follows earlier enforcement actions in July 2025, when the Enforcement Directorate (ED) conducted raids on over 35 premises and searched more than 50 companies linked to the Reliance Anil Ambani Group in New Delhi and Mumbai. These actions were part of an investigation into the alleged illegal diversion of loans by the group.
Market Reaction
The share prices of Reliance Infrastructure and Reliance Power declined by 2.4% and 2.2%, respectively, following the SEBI notices. This contrasts with a 0.7% rise in the benchmark BSE Sensex on the same day, indicating investor concern over the regulatory scrutiny.
Implications
SEBI’s show cause notices highlight the regulatory focus on corporate governance and transparency in large financial settlements. For the Reliance Anil Ambani Group, this adds another layer of regulatory and market scrutiny amidst ongoing investigations into loan diversions and financial practices.
Analysts note that while the companies assert compliance with the Mediation Act and proper disclosure, market sentiment can remain volatile until SEBI concludes its review. The notices also serve as a reminder to corporates about the importance of full transparency in high-value settlements and adherence to regulatory norms.
In conclusion, the SEBI show cause notices to Reliance Power and Reliance Infrastructure over the ₹6,503 crore CLE settlement underline the heightened regulatory oversight in India’s corporate sector. The coming months will be crucial in determining regulatory outcomes and market confidence for the Anil Ambani-led Reliance companies.