SEBI Bars Anil Ambani From Capital Market For Five Years
SEBI barred Anil Ambani and 24 other entities from the securities market for five years and restrained Ambani from being associated with any listed company.
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The Securities and Exchange Board of India has barred industrialist Anil Ambani and 24 other entities for five years for diversion of funds from Reliance Home Finance Ltd.
While Ambani has been restrained with 24 others for five years, RHFL has been restrained for 6 months only. The entities have been barred from being associated with the securities market, including as a director or key managerial personnel in any listed company, for a period of five years.
In total, India's market regulator imposed a fine of over Rs 625 crore for all entities involved in the scam.
All these entities will have to pay the respective penalty imposed on them within a period of 45 days from the date of receipt of the order, SEBI ordered.
SEBI found that Anil Ambani, with the help of Reliance Home Finance's key managerial personnel, orchestrated a fraudulent scheme to syphon funds from the company by disguising them as loans to entities linked to him.
The board of directors of RHFL expressed concern about the composition of the lending portfolio, which was ignored and did not comply with the directions, SEBI said in its 222-page report. "It would be unfair and disproportionate to treat the company RHFL on the same footing as that of the aforesaid persons."
SEBI noted that the promoter and management of the company approved loans worth hundreds of crores to closely linked companies with little to no assets, cash flow, net worth, or revenue.
Most of these borrowers failed to repay their loans, causing RHFL to default on its own debt obligations. Specifically, RHFL’s loans surged from Rs 3,742.60 crore in 2017–18 to Rs 8,670.80 crore in 2018–19.
Key findings showed that many loan applications had serious documentation and procedural flaws, including missing field investigations, inadequate eligibility checks, and incomplete loan forms. Despite these lapses, the loans were sanctioned by RHFL’s credit committees, ignoring significant financial red flags in borrower entities.
Other implicated individuals face similar restrictions. The fine for Amit Bapna is Rs 27 crore, comprising Rs 25 crore and an additional penalty of Rs 2 crore. Ravindra Sudhalkar's total fine is Rs 26 crore, combining Rs 25 crore and Rs 1 crore from another penalty. Pinkesh R. Shah faces a total fine of Rs 21 crore, made up of Rs 20 crore plus Rs 1 crore from additional penalties.
Other entities each face a fine of Rs 25 crore, including Adhar Project Management and Consultancy Pvt., Indian Agri Services Pvt., Phi Management Solutions Pvt., Arion Movie Productions Pvt., Citi Securities and Financial Services Pvt., Deep Industrial Finance Ltd., Reliance Exchange Ltd., Reliance Commercial Finance Ltd., Reliance Cleangen Ltd., Reliance Business Broadcast News Holdings Ltd., and Reliance Big Entertainment Pvt.
SEBI's probe was fuelled by multiple complaints about the diversion of funds at RHFL. The investigation uncovered that many loan applications were processed and approved on the same day, with several deviations from standard approval procedures.
