Sebi Bans Anil Ambani and 24 Others from Securities Market for Five Years Over Fund Misuse
News Mania Desk/Agnibeena Ghosh/23rd August 2024
The Securities and Exchange Board of India (Sebi) has imposed a significant ban on businessman Anil Ambani and 24 other entities, including former top officials of Reliance Home Finance Ltd (RHFL), for a period of five years due to alleged fund diversion. According to reports by PTI, Sebi has also slapped a hefty penalty of Rs 25 crore on Ambani, prohibiting him from participating in any securities market activities, including holding positions as a director or Key Managerial Personnel (KMP) in listed companies or registered intermediaries.
In addition to Ambani, Sebi’s directive includes a six-month ban on RHFL and a fine of Rs 6 lakh. The regulator’s action extends to key former RHFL officials Amit Bapna, Ravindra Sudhalkar, and Pinkesh R Shah, who have been fined Rs 27 crore, Rs 26 crore, and Rs 21 crore respectively. Other entities involved, such as Reliance Unicorn Enterprises, Reliance Exchange Ltd, Reliance Commercial Finance Ltd, Reliance Cleangen Ltd, Reliance Business Broadcast News Holdings Ltd, and Reliance Big Entertainment Private Ltd, have each been penalized with Rs 25 crore.
Sebi’s comprehensive 222-page order reveals that Anil Ambani, with assistance from RHFL’s senior management, orchestrated a fraudulent scheme to siphon off funds. These funds were disguised as loans to entities linked to Ambani. Despite directives from RHFL’s Board of Directors to halt such practices, the management disregarded these instructions, indicating a severe lapse in governance driven by Ambani’s influence.
The order highlights the reckless approval of substantial loans by RHFL’s management to companies with minimal assets, cash flow, or revenue, suggesting a “sinister objective” behind these transactions. The suspicious nature of these loans, often linked to RHFL’s promoters, led to the company defaulting on its debt obligations, severely impacting over 900,000 public shareholders who have faced significant losses.
In 2022, Sebi had already restricted RHFL, Ambani, Bapna, Sudhalkar, and Shah from participating in the securities market pending further orders. Notably, in February 2020, Ambani declared himself “bankrupt” to a UK court, claiming a net worth of “zero.”
This ruling underscores Sebi’s commitment to maintaining integrity in the financial markets by addressing fraudulent practices and ensuring that those involved in misconduct are held accountable. The extended bans and substantial fines aim to deter similar fraudulent activities and protect investors’ interests.
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