The Securities and Exchange Board of India (SEBI) has taken decisive action against industrialist Anil Ambani and 24 other entities, including former top officials of Reliance Home Finance Ltd (RHFL), by barring them from participating in the securities market for five years. The move comes in response to a fund diversion scandal involving RHFL, where SEBI has also imposed a hefty penalty of ₹25 crore on Anil Ambani. Additionally, Ambani has been prohibited from holding any position as a director or Key Managerial Personnel (KMP) in any listed company or intermediary registered with SEBI.RHFL and Anil Ambani: A scheme of fund diversionIn a detailed 222-page order, SEBI outlined how Anil Ambani, with the assistance of RHFLs key managerial personnel, orchestrated a fraudulent scheme to siphon off funds from the company. These funds were disguised as loans to entities linked to Ambani. Despite strong directives from the RHFL Board of Directors to cease such lending practices and regular reviews of corporate loans, the management ignored these orders, highlighting a significant governance failure. SEBI noted that this failure was driven by key managerial personnel operating under the influence of Ambani.Anil Ambanis role as ADA group chairpersonSEBIs findings reveal that Anil Ambani exploited his position as the chairperson of the Anil Dhirubhai Ambani Group (ADA Group) and his substantial indirect shareholding in RHFLs holding company to orchestrate the fraud. The funds, structured as loans, were funneled to credit-unworthy conduit borrowers and onward to entities linked to Ambani, demonstrating a calculated effort to divert public funds.Penalties imposed on 24 entitiesIn addition to Anil Ambani, SEBI has also taken action against 24 other entities, including former key officials of RHFL. These individuals, such as Amit Bapna, Ravindra Sudhalkar, and Pinkesh R. Shah, have been fined ₹27 crore, ₹26 crore, and ₹21 crore, respectively. Furthermore, SEBI has imposed penalties of ₹25 crore each on several Reliance entities, including Reliance Unicorn Enterprises, Reliance Exchange Next Ltd, Reliance Commercial Finance Ltd, Reliance Cleangen Ltd, Reliance Business Broadcast News Holdings Ltd, and Reliance Big Entertainment Private Ltd.SEBIs broader impactThis stringent action by SEBI underscores its commitment to upholding transparency and accountability in the securities market. The penalties and restrictions imposed on Anil Ambani and the implicated entities send a strong message to corporate leaders about the consequences of engaging in fraudulent practices.
