The market regulator Securities and Exchanges Board of India has barred Anil Ambani and 24 other entities from the capital market for five years, restraining the business man from being associated with any listed company. The SEBI barred the industrialist and 24 other entities for diversion of funds from Reliance Home Finance Ltd.
Has slapped a fine of Rs 25 crore on Anil Ambani and barred him from associating with the securities market, including as a director or key managerial personnel in any listed company, or any intermediary registered with the market regulator, for five years. Besides, the regulator barred Reliance Home Finance Ltd from the securities market for six months with a fine of Rs 6 lakh. In its 222-page order, SEBI said that Anil Ambani, with the aid of RHFL's key managerial personnel, indulged in a fraudulent scheme for the siphoning off of funds from RHFL by disguising them as loans to entities that were connected with him.
"Board of Directors of RHFL issued strong directives to stop this kind of lending practices and reviewed on regular basis corporate loans but the company's management ignored these orders.". "This indicates a serious governance failure, instigated at the instance of certain key managerial personnel of the company under the influence of Anil Ambani," the Sebi order said. That its findings have established the "existence of a fraudulent scheme, orchestrated by Noticee No. 2 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".
Besides these companies, it has banned 24 other entities, including Amit Bapna, Ravindra Sudhalkar, and Pinkesh R. Shah, former key officials of RHFL. The regulator has also fined Bapna Rs 27 crore, Rs 26 crore on Sudhalkar, and Rs 21 crore on Shah. While the penalty on each of the other firms — Reliance Unicorn Enterprises, Reliance Exchange Next Ltd, Reliance Commercial Finance Ltd, Reliance Cleangen Ltd, Reliance Business Broadcast News Holdings Ltd and Reliance Big Entertainment Pvt Ltd — has been fixed at Rs 25 crore.
These fines were imposed for "either receiving the illegally obtained loans or acting as intermediaries to facilitate the illegal diversion of funds from RHFL". The markets regulator, in its order, said, "The cavalier approach of the management and promoter of the company while sanctioning hundreds of crores of rupees loans to such companies which had negligible assets, cash flow, net worth or revenue.
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