Mint Explainer: Why Sebi held Anil Ambani, others accountable in RHFL loan probe
₹25 crore fine on industrialist Anil Ambani, accusing him of orchestrating a fraudulent scheme to siphon off funds from Reliance Home Finance Ltd (RHFL). The action marks a significant escalation in Sebi's efforts to hold corporate leaders accountable for financial misconduct, as it has also banned Ambani and 24 others, including top executives from RHFL, from participating in the securities market for five years.
Mint breaks down Sebi's investigation and the order authored by whole-time member Ananth Narayan G. Sebi's investigation into RHFL was triggered by multiple complaints alleging the diversion of funds within the company.
RHFL, a lender focused on housing loans, loan against property, and construction finance, was found to have disbursed a series of large general-purpose capital (GPC) loans during FY19. These loans were extended to financially weak and obscure borrowers, a practice that raised red flags due to the company's low reported credit losses.
Read this | Sebi ramps up investigations amid market turmoil Sebi's probe revealed that these loans, which made up nearly half of RHFL's assets, were part of a larger scheme designed to siphon off thousands of crores of rupees, leading to the eventual collapse of the company. The scheme not only drained the company’s financial resources but also inflicted significant losses on investors and destabilized the business.
“As a result of their egregious device to siphon out several thousands of crores of rupees from RHFL…the company eventually collapsed, causing immense loss to its investors and ecosystem," Sebi noted in its order. The case also implicated several other companies, including Reliance Inceptum Pvt Ltd, Reliance Innoventures Pvt Ltd, Reliance Infrastructure
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