The Securities and Exchange Board of India on Thursday banned businessman Anil Ambani and 24 other persons and companies from the capital markets for five years for fraudulently diverting funds from Reliance Home Finance Limited.
In its order, the markers regulator also imposed a fine of Rs 25 crore on Ambani, saying he had orchestrated a fraudulent scheme to siphon off funds from the financial services company by structuring them as loans to entities linked to him.
Reliance Home Finance Limited is part of the Reliance ADAG Group.
Ambani, the chairman of the conglomerate, has been barred from being associated with the securities market, including as a director or as key managerial personnel in any listed company, or any intermediary registered with the Securities and Exchange Board of India, during this period.
Reliance Home Finance Limited has also been banned for six months from the securities market and fined Rs 6 lakh.
The markets regulator noted that Reliance Home Finance Limited’s management had ignored the directives given by the board of directors, which reviewed corporate loans regularly, to stop such lending practices.
This showed a failure on part of the governance of the financial services company, which was driven by certain key managerial personnel under the influence of Ambani, the regulator said.
Under these circumstances, Reliance Home Finance should not be held as equally responsible as the individuals who were involved in the fraud, the Securities and Exchange Board of India said.
It also said that other persons and companies being banned were either recipients of illegally obtained loans or conduits to enable unlawful diversion of funds from Reliance Home Finance Limited.
Those banned include former Reliance Home Finance Limited officials Amit Bapna, Ravindra Sudhalkar and Pinkesh R Shah. While Bapna was asked to pay a penalty of Rs 27 crore, Sudhalkar was fined Rs 26 crore and Shah Rs 21 crore.
Other entities, including Reliance Unicorn Enterprises, Reliance Exchange Next Limited, Reliance Commercial Finance Limited, Reliance Cleangen Limited, Reliance Business Broadcast News Holdings Limited and Reliance Big Entertainment Private Limited were also penalised Rs 25 crore each.
In February 2022, the Securities and Exchange Board of India passed an interim order restraining Reliance Home Finance Limited, Ambani and others from the securities market till further orders in connection with the matter, PTI reported.
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