SEBI Penalises Anmol Ambani, Anil Ambani's Son, For Laxity In Loan Approvals At Reliance Home Finance
Anil Ambani was also fined Rs 25 crore for his involvement in fund diversion within Reliance Home Finance.
The Securities and Exchange Board of India has imposed a fine of Rs 1 crore on Anmol Ambani, director at Reliance Home Finance Ltd., and the son of Anil Ambani due to a failure to exercise due diligence in the approval of loans.
Additionally, Krishnan Gopalakrishnan, the former Chief Risk Officer at RHFL, has been fined Rs 15 lakh for his role in the matter. Both individuals are required to pay the fines within 45 days.
This decision follows Sebi's earlier actions against Anil Ambani, Anmol's father, who, along with 24 others, was banned from the securities market for five years in August. Anil Ambani was also fined Rs 25 crore for his involvement in fund diversion within Reliance Home Finance.
The penalties are linked to the SEBI investigation into loan disbursals during the year 2018-19. A report by PwC, which resigned as RHFL's auditor had raised concerns about the company's financial practices.
Sebi’s investigation revealed that over Rs 8 thousand crores were disbursed as General Purpose Corporate Loans (GPCLs) to 45 entities. Additionally, a further alleged mismatch of Rs 824.60 crores in lending was also seen.
This brought the total lending during the investigation period to Rs 9,295.25 crores. The loans were primarily directed towards financially weak entities, many of which had negative or negligible net worth.
The investigation uncovered that these borrowers were often connected to the Reliance ADA Group, sharing common addresses, directors, and email IDs.
Notably, Rs 2,970.32 crores of the loans were partly secured by guarantees from Reliance Power Limited and Reliance Infrastructure Limited, raising concerns about the legitimacy of these guarantees, as RHFL had not exercised them to recover outstanding amounts.
Sebi found that out of the Rs 4,944.34 crores disbursed to the top 13 borrowers, approximately Rs 4,533.43 crores (around 91.69%) were onward lent to nine promoter-related entities, indicating that these borrowers were merely conduits for passing on funds.
Despite documented deviations in credit approval memos, Gopalakrishnan approved multiple loan applications and failed to raise concerns to the board, affecting the interests of RHFL’s stakeholders.
