Market Regulator Acts Against Anil Ambani and Reliance Home Finance In a decisive move, the Securities and Exchange Board of India (SEBI) has banned Anil Ambani and 24 other individuals from participating in the securities market for five years. This action comes with a substantial financial penalty of ₹25 crore imposed on Ambani. The penalty and ban are part of a broader crackdown related to the alleged diversion of funds at Reliance Home Finance Limited (RHFL).
SEBI’s Comprehensive Order and Penalties
According to SEBI’s detailed 222-page final order, Anil Ambani and key managerial personnel at RHFL orchestrated a fraudulent scheme to divert funds from the company. The funds, which were purportedly issued as loans, were allegedly funneled to entities associated with Ambani. Despite clear directives from RHFL’s board to cease such practices and conduct regular reviews of corporate loans, these instructions were disregarded.
As part of the action, SEBI has also imposed a six-month ban on RHFL from participating in the securities market and slapped a fine of ₹6 lakh on the company.
Fraudulent Conspiracy Unveiled
SEBI’s findings reveal that Ambani, leveraging his position as Chairman of the ADA Group and his significant indirect stake in RHFL’s holding company, facilitated the fraudulent scheme. The order highlights the issuance of large loans to companies with no discernible assets or revenue, which were closely linked to Ambani. This raised serious concerns about the intent behind these transactions.
Impact on RHFL and Its Shareholders
The regulator noted that the majority of these loans were ultimately defaulted on, which in turn caused RHFL to default on its own obligations. This led to the company’s resolution under the Reserve Bank of India’s framework, severely impacting its public shareholders.
SEBI’s stringent measures underscore the seriousness of the regulatory body’s commitment to curbing financial misconduct and protecting market integrity.