Anil Ambani Banned From SEBI for 5 years, Rs 25 Crore Fine Imposed

Markets regulator SEBI has taken decisive action against industrialist Anil Ambani and 24 other entities, including former key Reliance Home Finance (RHFL) officials. The reason? A fraudulent scheme orchestrated by Ambani himself to divert funds from RHFL.

Barred from Securities Market:

SEBI has imposed a penalty of ₹25 crore on Anil Ambani and barred him from being associated with the securities market for five years. This means Ambani cannot serve as a director or Key Managerial Personnel (KMP) in any listed company or intermediary registered with SEBI during this period. Reliance Home Finance (RHFL) has also been barred from the securities market for six months, with a fine of ₹6 lakh.

The Fraudulent Scheme:

Leveraging his position as the ‘chairperson of the ADA group,’ Ambani orchestrated the fraud. RHFL’s key managerial personnel were complicit in disguising funds as loans to entities linked to Ambani. Despite strong directives from RHFL’s Board of Directors to stop such practices, the management ignored them.

Cavalier Lending Practices:

The company’s management and promoters approved loans worth hundreds of crores to companies with little to no assets, cash flow, net worth, or revenue. Many of these borrowers were closely linked to RHFL’s promoters, raising suspicions about the true purpose of these ‘loans.’

SEBI’s Findings:

SEBI’s 222-page final order established the fraudulent scheme’s existence. Funds were structured as ‘loans’ to credit-unworthy conduit borrowers, ultimately benefiting entities associated with Ambani, reported The Economic Times.
RHFL itself is not equally responsible; the individuals involved orchestrated the fraud.

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