Sebi Bans Anil Ambani from Security Market for 5 Yrs, Fines Him Rs 25 Cr

New Delhi: The Securities and Exchange Board of India (Sebi) has banned industrialist Anil Ambani and 24 other entities from the securities market for five years for diversion of funds from the company. The others include former key officials of Reliance Home Finance.

Sebi has also imposed a fine of Rs 25 crore on Anil Ambani and has banned him from any association with the securities market, including serving as a director or Key Managerial Personnel (KMP) in any listed company or intermediary registered with the regulator, for a period of five years.

Sebi has barred Reliance Home Finance from the securities market for six months and fined it Rs 6 lakh.

In its 222-page final order, Sebi revealed that Anil Ambani and RHFL’s top executives orchestrated a fraudulent scheme to divert funds from RHFL under the guise of loans to entities connected to him.

Sebi concluded that the fraudulent scheme was executed by Ambani and the KMPs of RHFL, funnelling funds through credit-unworthy conduit borrowers, all of whom were linked to Ambani himself.

Sebi pointed out that loans worth hundreds of crores were approved for companies with little to no assets, cash flow, or revenue, suggesting a deliberate intent behind these loans. This left public shareholders, including over 9 lakh investors, with significant losses.

RHFL’s share price, which stood at Rs 59.60 in March 2018, plummeted to Rs 0.75 by March 2020 as the fraud was revealed.

Sebi imposed penalties on 24 restrained entities, including former RHFL officials Amit Bapna, Ravindra Sudhalkar, and Pinkesh R Shah. Ambani was fined Rs 25 crore, Bapna Rs 27 crore, Sudhalkar Rs 26 crore, and Shah Rs 21 crore.

It also imposed Rs 25 crore fines on several other entities, such as 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.

These entities were either recipients of the siphoned funds or intermediaries in the fraudulent diversion of RHFL’s resources.