When it rains, it pours. We keep talking about the strategic opportunities in India, but we have also stressed corporate governance concerns. Here is another reason why that has been the case.
News that Anil Ambani’s side of the Reliance corporate empire got notices from regulators regarding potential accounting “errors” — that could lead to fines or sterner action — pushed shares down as much as 10% to 19% on Wednesday, cracking new 52-week lows in the process.
Anil Ambani’s companies include Reliance Capital, Reliance Communications, Reliance Power and the center of the gossip, Reliance Infrastructure. All are publicly traded and represent part of the country’s biggest industrial complex, the sprawling Reliance Group.
Spokesmen have claimed that traders dumping shares of the Reliance companies are indulging in “illegal” behavior and that the regulators have simply asked for publicly accessible documents.