The Securities and Exchange Board of India took decisive action on Thursday by barring Anil Ambani and 24 others from participating in the capital markets for five years due to their involvement in diverting funds from Reliance Home Finance Limited.
Further, a significant fine of Rs 25 crore was imposed on Ambani for his role in orchestrating a fraudulent scheme that funneled funds away from the financial services company by disguising them as loans to entities associated with him.
Ambani, the chairman of the conglomerate, has been prohibited from involvement in the securities market, including serving as a director or key managerial personnel in any listed company, or any intermediary registered with the Securities and Exchange Board of India, for the specified duration.
Additionally, Reliance Home Finance Limited faces a six-month ban from the securities market and a fine of Rs 6 lakh.
The regulatory body observed that the management of Reliance Home Finance Limited disregarded the directives from the board of directors, who consistently reviewed corporate loans, to cease these lending practices.
This highlights a governance failure within the financial services company, led by specific key managers influenced by Ambani, as stated by the regulator.
According to SEBI, Reliance Home Finance should not be held as accountable as those directly implicated in the fraud. The regulatory body further indicated that the other banned parties were either recipients of illegally acquired loans or channels used to unlawfully divert funds from Reliance Home Finance Limited.
Included in the ban are former Reliance Home Finance Limited executives Amit Bapna, Ravindra Sudhalkar, and Pinkesh R Shah. Bapna was penalized Rs 27 crore, while Sudhalkar and Shah were fined Rs 26 crore and Rs 21 crore, respectively.
Several other entities, including Reliance Unicorn Enterprises, Reliance Exchange Next Limited, Reliance Commercial Finance Limited, Reliance Cleangen Limited, Reliance Business Broadcast News Holdings Limited, and Reliance Big Entertainment Private Limited, were also fined Rs 25 crore each.
The SEBI passed an interim order in February 2022, prohibiting Reliance Home Finance Limited, Ambani, and others from participating in the securities market until further orders, according to PTI.
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