The Securities and Exchange Board of India (SEBI) has taken significant action against industrialist Anil Ambani.
The market regulator has banned Ambani, along with 24 other entities, including former top executives of Reliance Home Finance, from the equity market for five years.
Additionally, a fine of Rs 25 crore has been imposed.
This action was taken by SEBI due to allegations of fund diversion from the company.
SEBI has fined Anil Ambani ₹25 crore and prohibited him from acting as a director or key managerial personnel (KMP) in any listed company or registered intermediary for five years.
Additionally, SEBI has banned Reliance Home Finance from the securities market for six months and imposed a ₹6 lakh fine on the company.
Which 24 entities have been banned?
The 24 entities banned include former Reliance Home Finance Limited CEOs Amit Bapna, Ravindra Sudhalkar, and Pinkesh R Shah.
SEBI has imposed fines of Rs 25 crore on Anil Ambani, Rs 27 crore on Bapna, Rs 26 crore on Sudhalkar, and Rs 21 crore on Shah.
Additionally, Reliance Unicorn Enterprises, Reliance Exchange Next LT, Reliance Commercial Finance Limited, Reliance Cleangen Limited,
Reliance Business Broadcast News Holdings Limited, and Reliance Big Entertainment Private Limited each face fines of Rs 25 crore.
What did SEBI find against Anil Ambani?
In its 222-page final order, SEBI discovered that Anil Ambani, with the assistance of key management at Reliance Home Finance Limited (RHFL),
orchestrated a fraudulent scheme to divert funds from RHFL by disguising them as loans to entities connected to him.
Despite the RHFL board issuing strict directives to prevent such lending practices and conducting regular reviews of corporate loans, the company’s management disregarded these instructions.
SEBI’s report reveals that Anil Ambani and the company’s management orchestrated the fraud.
Funds were misused by RHFL’s key management personnel and were lent to unqualified borrowers, disguised as loans to ‘promoter-related entities.’
Anil Ambani exploited his role as ‘Chairman of ADM Group’ and his substantial indirect ownership in RHFL’s holding company to execute the fraud.
RHFL currently has over 900,000 shareholders
In its order, the market regulator highlighted the careless approach of the company’s management and promoters, who approved loans worth hundreds of crores to companies lacking assets, cash flow, net worth, or revenue.
This raised suspicions about the true intentions behind these loans.
As a result, many of these borrowers did not repay their loans, causing RHFL to default on its obligations.
This led to the company’s resolution under the RBI framework and significant trouble for its shareholders.
Currently, over 9 lakh shareholders of RHFL are facing substantial losses.
