Why Sebi banned Anil Ambani from the securities market for 5 years?
Anil Ambani, the former chairman of Reliance Home Finance (RHFL), and 24 other entities from the securities market for five years. This decision follows allegations of fund diversion from RHFL, where Ambani and key officials were found to have orchestrated a fraudulent scheme. Sebi also imposed a fine of Rs 25 crore on Ambani, alongside penalties on other individuals and entities involved.
Why Sebi banned Anil Ambani?
As per a PTI report, Sebi's investigation revealed that Anil Ambani, with the assistance of key managerial personnel at RHFL, siphoned off funds under the guise of loans to entities linked to him. Despite directives from the RHFL Board to halt such practices, the company's management ignored these orders, leading to a significant governance failure.
Sebi’s Findings in Anil Ambani Case
Sebi's 222-page order detailed the fraudulent activities, stating that Ambani used his position within the ADA group and his indirect shareholding in RHFL to execute the scheme. The order highlighted that loans were approved to companies with minimal assets or revenue, raising suspicions about the intentions behind these transactions.
Impact on RHFL and Shareholders
The fraudulent activities led to RHFL defaulting on its debt obligations, resulting in the company's resolution under the RBI Framework. Public shareholders of RHFL faced substantial losses, with the company's share price plummeting from Rs 59.60 in March 2018 to just Rs 0.75 by March 2020. As of now, over 9 lakh shareholders remain invested in RHFL, bearing
Read more on economictimes.indiatimes.com
