SEBI imposes restrictions on Anil Ambani, 24 other entities: Market regulator SEBI has banned 24 other companies including defaulter tycoon Anil Ambani, former officials of Reliance Home Finance from managing funds. They cannot deal in the securities market.
Anil Ambani fined 25 crores
SEBI banned Anil Ambani from holding any role in the securities market, including that of a director or key managerial personnel in any listed company and any intermediary registered with the market regulator. A fine of Rs 25 crore has also been imposed. Also, Reliance Home Finance has been banned for six months and fined Rs 6 lakh.
What was the matter?
SEBI said in its 222-page final order that Anil Ambani, with the help of RHFL's key officials, siphoned off funds from RHFL and lent them to other companies on fraudulent loans. Although RHFL's board of directors issued strict instructions to regularly review corporate loans and stop such loan processing, the company management ignored these orders. Some key officials under the influence of Anil Ambani failed to follow the rules. Given these circumstances, the RHFL company itself has become as much a partner in crime as the individual officials.
Apart from this, the rest of the companies played a role in illegally obtaining loans from RHFL to transfer the money illegally. Hence, they have also been banned.
Anil Ambani misused his role
Anil Ambani has been found guilty of abusing his position as the chairperson of the ADA Group and his substantial indirect stake in the holding company of RHFL to commit the fraud. The management and promoters of the company abused their power by sanctioning loans worth thousands of crores of rupees to companies with no assets, cash flow, net worth and revenues, which failed to repay the loans. Most of the borrowers were found to be linked to the promoters of Reliance Homes.
More than 9 lakh shareholders suffered losses
Reliance Home Finance defaulted after not repaying loans worth thousands of crores of rupees. After the scam came to light, the share price dropped from Rs. 60 to 0.75. Even now more than 9 lakh shareholders are facing huge losses. The 24 banned entities include former chief executives of Reliance Home Finance Limited (RHFL) Amit Bapna, Ravindra Sudhalkar and Pinkesh R Shah. They have been banned and fined Rs. Anil Ambani Rs. 25 crore, Bapna Rs. 27 crore, Sudhalkar Rs. 26 crore and Shah Rs. 21 crore.
Additionally, the remaining entities including Reliance Unicorn Enterprises, Reliance Exchange Next LT, Reliance Commercial Finance Limited, Reliance Klingon Limited, Reliance Business Broadcast News Holdings Limited and Reliance Big Entertainment Private Limited have been fined Rs. 25 crore each.