Securities and Exchange Board of India (SEBI) has barred industrialist Anil Ambani and 24 other entities, including key officials of Reliance Home Finance Ltd (RHFL), from the securities market for five years. SEBI’s investigation uncovered a fraudulent scheme involving the diversion of company funds through disbursement of general-purpose working capital loans to credit unworthy borrowers linked to Ambani. This resulted in significant financial losses for RHFL, ultimately leading to its default on lender payments and subsequent resolution under the RBI framework. SEBI has also imposed a Rs 25 crore penalty on Ambani and restricted him from serving as a director or Key Managerial Personnel (KMP) in any listed company or registered intermediary for five years. The combined penalties on Ambani and the other entities amount to over Rs 625 crore. Following the SEBI order, shares of Anil Ambani group companies, including Reliance Power, Reliance Infrastructure, and RHFL, witnessed significant declines. The SEBI order highlighted the active involvement of RHFL’s KMPs in executing the fraudulent scheme, which severely undermined investor trust and eroded the company’s finances. The regulator emphasized that the misuse of company funds, structured as loans, played a major role in RHFL’s financial downfall, affecting stakeholders and shaking confidence in the governance of financial sector entities.
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