The market regulator SEBI has banned industrialist Anil Ambani and 24 others, including former top officials of Reliance Home Finance (RHFL), from participating in the securities market for five years due to fund diversion from the company.
SEBI has fined Ambani Rs 25 crore and barred him from being involved with the securities market in any capacity, such as a director or key manager, for five years.
Additionally, Sebi has suspended Reliance Home Finance from the securities market for six months and imposed a fine of Rs 6 lakh on the company.
Sebi’s 222-page order reveals that Anil Ambani, with the help of RHFL’s top management, set up a fraudulent scheme to divert funds from RHFL by pretending they were loans to his related entities.
Even though RHFL’s Board of Directors had issued clear instructions to stop such lending practices and reviewed corporate loans regularly, the management ignored these orders.
This indicates a major failure in governance, influenced by certain key managers under Anil Ambani’s control.
Given the situation, RHFL itself should not be equally blamed as the individuals involved in the fraud.
The other entities involved either received the illicit loans or acted as middlemen to divert funds from RHFL.
Sebi’s investigation confirmed that there was a fraudulent scheme led by Anil Ambani and executed by RHFL’s key managers. They diverted funds from RHFL by creating fake loans to entities linked to Ambani.
Ambani used his role as the ADA group chairperson and his indirect shareholding in RHFL’s holding company to carry out the fraud.
Sebi’s order highlighted the reckless approach of the company’s management and promoter in approving large loans to companies with poor financial health.
Over 9 lakh shareholders remain invested in Reliance Home Finance Ltd (RHFL), facing significant financial losses. The Securities and Exchange Board of India (Sebi) has fined 24 entities, including former key officials of RHFL, such as Amit Bapna, Ravindra Sudhalkar, and Pinkesh R Shah, for their involvement in the case. Anil Ambani has been fined Rs 25 crore, Bapna Rs 27 crore, Sudhalkar Rs 26 crore, and Shah Rs 21 crore. Several companies, including Reliance Unicorn Enterprises, Reliance Exchange Next Ltd, Reliance Commercial Finance Ltd, Reliance Cleangen Ltd, Reliance Business Broadcast News Holdings Ltd, and Reliance Big Entertainment Pvt Ltd, have also been fined Rs 25 crore each. These fines are for either receiving illegal loans or acting as intermediaries in the diversion of funds from RHFL.
In February 2022, Sebi issued an interim order barring Reliance Home Finance Ltd, Anil Ambani, and three other individuals (Amit Bapna, Ravindra Sudhalkar, and Pinkesh R Shah) from participating in the securities market due to allegations of siphoning funds from the company.
Update
Reliance Home Finance key shareholders include Promoter 0.74%, LIC 1.54%, Ramakrishna Reddy 2.43%, Suma Reddy 2.11%, Suryaben Gudhka 1.16%, and Citadel Securities 1.1%.
Additionally, 940,285 retail shareholders hold a total of 427,259,405 shares.
Source: PTI
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