Mumbai: Two former bankers with Swiss bank UBS AG tried to create an offshore vehicle based in Mauritius through which Reliance Group chairman Anil Ambani could illegally invest in securities in India, the Financial Times reported on Tuesday, citing evidence heard in a London tribunal.
Sachin Karpe, former head of the desk that managed Indian client portfolios at the UBS wealth management division in London and another banker who cannot be named for legal reasons, were fined £1.25 million by the UK’s financial regulator, Financial Services Authority (FSA), for misleading UBS’s compliance team.
They allegedly misled UBS’s compliance team by maintaining that the Mauritius-registered vehicle Pleuri was owned by a wealthy French couple, while the ultimate owner was Ambani. UBS ultimately refused to sanction the structure.
“The source of funds...was plainly the Ambani family,” Jonathan Crow, Queen’s counsel for the FSA, told the tribunal on Tuesday, the UK-based newspaper reported.
Indian nationals and companies are not permitted to invest in Indian securities through foreign institutional investors.
“(Ambani) asked for a transaction and Sachin Karpe enabled it,” Michael Blair, Queen’s counsel and Karpe’s barrister, said, according to the FT. “There was no suggestion that the client himself was damaged. The most that can be thrown at (Karpe’s) door was that he probably ought to have told the client that the bank would not deal with him because the transaction was not legal in India,” the paper cited him as saying
Ambani, who is not represented at the tribunal hearing, has not been accused by the FSA of any wrongdoing.
In an official communication, the Reliance Group said the matter was nearly five years old and had already been closed with Indian regulators.
“There are no charges levelled against us by the UK regulators in these proceedings. As such, we are not party to these proceedings, and not represented therein.” the Reliance Group statement said.