In a sweeping action against financial misconduct, the Securities and Exchange Board of India (Sebi) has imposed a five-year ban on industrialist Anil Ambani and 24 other entities, including former top officials of Reliance Home Finance Ltd (RHFL). The ban is a result of a major fund diversion scandal involving RHFL, where funds were allegedly siphoned off by disguising them as loans to entities linked to Ambani.
Sebi has slapped Ambani with a hefty penalty of ₹25 crore and barred him from holding any position in the securities market—whether as a director, key managerial personnel (KMP) in any listed company, or as an intermediary registered with Sebi—over the next five years.
In addition, Sebi has prohibited Reliance Home Finance from participating in the securities market for six months and has imposed a fine of ₹6 lakh on the company.
The regulator’s 222-page final order reveals that Ambani, with the aid of RHFL’s key managerial personnel, orchestrated a fraudulent scheme to divert funds by presenting them as loans to entities associated with him. Despite directives from RHFL’s Board of Directors to halt such practices, the company’s management, influenced by Ambani, ignored these orders, demonstrating severe governance failures.
Sebi’s investigation uncovered that the fraudulent scheme involved structuring funds as ‘loans’ to borrowers with little creditworthiness, all of whom were linked to Ambani. This scheme led to RHFL’s financial downfall, with the company’s share price plummeting from ₹59.60 in March 2018 to a mere ₹0.75 by March 2020, significantly impacting over 9 lakh public shareholders.
The penalty extends beyond Ambani, affecting key RHFL officials including Amit Bapna, Ravindra Sudhalkar, and Pinkesh R Shah, who have been fined ₹27 crore, ₹26 crore, and ₹21 crore respectively. Other entities involved, such as Reliance Unicorn Enterprises and Reliance Big Entertainment Pvt Ltd, have also been fined ₹25 crore each for their roles in the fraudulent scheme.
This action follows Sebi’s interim order in February 2022, which had initially restricted these parties from the securities market pending further investigation.
