The Securities and Exchange Board of India (SEBI) imposed a ban on industrialist Anil Ambani and several former key officials of Reliance Home Finance (RHFL) from the securities market for five years. The 24 restrained entities include former key officials of RHFL Amit Bapna, Ravindra Sudhalkar and Pinkesh R Shah.
The action from the market regulator comes in the wake of SEBI finding Anil Ambani and others guilty of diversion of funds from the company.
Besides, the regulator has also imposed a fine of Rs 25 crore on Ambani and restrained him from being associated with the securities market including as a director or Key Managerial Personnel (KMP) in any listed company, or any intermediary registered with the market regulator, for five years.
SEBI, in its 222-page final order, also barred Reliance Home Finance from the securities market for six months and imposed a fine of Rs 6 lakh on it.
SEBIfound that Anil Ambani, with the help of Reliance Home Finance's key managerial personnel, orchestrated a fraudulent scheme to siphon off funds from the company by disguising them as loans to entities linked to him.
Ambani used his position as 'chairperson of the ADA group' and his significant indirect shareholding in the holding company of RHFL to orchestrate the fraud, the regulator found. The company's management also ignored orders of the board of directors of RHFL to stop such fraudulent lending practices. This indicated a significant failure of governance, driven by certain key managerial personnel under the influence of Anil Ambani, SEBI noted.
SEBI said its findings 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)".
