SEBI Bars Anil Ambani, 24 Others From Securities Market For 5 Years: Here's Why

The Securities and Exchange Board of India (SEBI) has barred Anil Ambani and 24 other entities, including former top officials of Reliance Home Finance Ltd (RHFL), from the securities market for five years for alleged diversion of funds from the company.

SEBI has also imposed a hefty penalty of Rs 25 crore on Anil Ambani. He has been barred from any association with the securities market, which includes holding positions as a director or Key Managerial Personnel (KMP) in any listed company or any intermediary registered with the market regulator, for the next five years.

Additionally, SEBI has barred Reliance Home Finance from the securities market for a period of six months and has imposed a fine of Rs 6 lakh on the company.

According to SEBI's detailed 222-page final order, Anil Ambani, in collaboration with key managerial personnel of RHFL, orchestrated a fraudulent scheme to siphon off funds from RHFL by disguising them as loans to entities linked to him.

Although the Board of Directors of RHFL had issued directives to halt such lending practices and reviewed corporate loans regularly, the company's management ignored these orders.

SEBI said its findings have established the "existence of a fraudulent scheme, orchestrated by Noticee No. 2 (Anil Ambani) and administered by the KMPs of RHFL, to siphon off funds from the public listed company (RHFL) by structuring them as 'loans' to credit unworthy conduit borrowers, and in turn, to onward borrowers, all of whom have been found to be 'promoter linked entities' i.e. entities associated/linked with Noticee 2 (Anil Ambani)", NDTV reported.

SEBI's order, issued on Thursday (22 August), also highlighted the reckless approach taken by the company's management and its promoter in approving loans amounting to hundreds of crores to companies with minimal to no assets, cash flow, net worth, or revenue.

Additionally, SEBI imposed a Rs 25 crore fine on Anil Ambani, while Amit Bapna, Ravindra Sudhalkar, and Pinkesh R Shah were fined Rs 27 crore, Rs 26 crore, and Rs 21 crore, respectively.

Further, penalties of Rs 25 crore each were imposed on other entities, 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 Private Ltd.

These fines were levied for their involvement in either receiving the illegally obtained loans or acting as intermediaries to facilitate the illegal diversion of funds from RHFL.